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“When the capital development of a country becomes a by-product
of the activities of a casino, the job is likely to be ill-done.”
John Maynard Keynes
"Life is a school of probabilities."
Note: Some thoughts on 2019 added on Jan 3, 2019.
Neoliberal economics (aka casino capitalism) function from one crash to another. Risk is pervasively underpriced under neoliberal system, resulting in bubbles small and large which hit the economy periodically. The problem are not strictly economical or political. They are ideological. Like a country which adopted a certain religion follows a certain path, The USA behaviour after adoption of neoliberalism somewhat correlate with the behaviour of alcoholic who decided to booze himself to death. The difference is that debt is used instead of booze.
Hypertrophied role of financial sector under neoliberalism introduces strong positive feedback look into the economic system making the whole system unstable. Any attempts to put some sand into the wheels in the form of increasing transaction costs or jailing some overzealous bankers or hedge fund managers are blocked by political power of financial oligarchy, which is the actual ruling class under neoliberalism for ordinary investor (who are dragged into stock market by his/her 401K) this in for a very bumpy ride. I managed to observe just two two financial crashed under liberalism (in 2000 and 2008) out of probably four (Savings and loan crisis was probably the first neoliberal crisis). The next crash is given, taking into account that hypertrophied role of financial sector did not changes neither after dot-com crisis of 200-2002 not after 2008 crisis (it is unclear when and if it ended; in any case it was long getting the name of "Great Recession").
Timing of the next crisis is anybody's guess but it might well be closer then we assume. As Mark Twain aptly observed: "A thing long expected takes the form of the unexpected when at last it comes" ;-):
This morning that meant a stream of thoughts triggered by Paul Krugman’s most recent op-ed, particularly this:
Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.
Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.
As most 401K investors are brainwashing into being "over bullish", this page is strongly bearish in "perma-bear" fashion in order to serve as an antidote to "Barrons" style cheerleading. Funny, but this page is accessed mostly during periods of economic uncertainty. At least this was the case during the last two financial crisis(2000 and 2008). No so much during good times: the number of visits drops to below 1K a month.
It was clear that 2017 stock market run was detached from fundamentals. Mostly speculative run. And the current stock market decline could well happen three months aerler or three month later but it was in the cards. It is difficult to estimate the power of inertia in such speculative runs. Also layoffs and decline of the standard liming of workers and lower middle class still can continue to improve the balance sheet until "Yellow Vests" moment stops them.
Jobs created now are mostly "inferior" low paid or temp/contractor jobs and the numbers just mask the cruel reality of the USA job market.
Which in reality is dismal, especially for young and old workers. several more or less paid specialties disappeared in 2018 due to automation (cash office worker is one). automatic cashier is supermarkets are also now more visible. So spontaneous cases of vandalism, killings of coworkers and other form of "action of desperation" (as well as the rate of death from opioids -- which is yet another form of the same) would not be too surprising in such an atmosphere. Even with the power of the current national security state. Trump is playing with fire trying to cut on food stamps and implementing some other action in this program of "national neoliberalism" which is in internal policy is almost undistinguishable from neofascism. He risk facing "Macron situation" sooner or later.
In any case at some point Minsky moment should arrive for the stock market. I am not sure that the current decline is that start of such an event. It might be postponed further down the line for a year or two. But it will eventually come. We can only guess what form it might take, but with the current Apple troubles and valuations of tech sector I think it might take the form of something similar to dot-com bubble deflation No.2
I do not see Amazon, Google, Facebook and Microsoft and other tech high flyers completely immune to the stock crash of 50% magnitude or more. For example, Google is overly dependent on advertising revenue which can grow only by strangulating small sites owners which use it as the advertizing platform (which it successfully implements fro several years now). But at some point owners might revolt and start dropping it for Microsoft or other platform. Facebook might face a backlash, if people understand that selling data about them in the part of the business model, not an aberration.
One of the most unexplainable things that happened in 2018 was dramatic fall of oil prices in the Q4. This was quite surprising (and destructive) after the period of little or no capital investment in the new fields for three years or so. Shale oil production increases in the USA are only possible if junk bonds can be produced along with it. Junks bonds that will never be paid. With the current debt load and prices below $50 most of the USA shale oil companies are zombies. Most if not all of thenm are losing money. Only return of ~$70 oil prices can save them, if anything at all. WSJ touched this topic recently.
So this surprising fall of oil prices (from around $70 to around $43 WTI) looks connected to the speculations in the "paper oil" market.
Financialization allows for oil price to be completely detached from fundamentals for a year or even two (Saudis need over $80 I think to balance the budget, I think; this represents "fair price" as they are one of the three largest producers).
But you will never know this unless there are shortages at gas stations. The difference is covered by inflated statistics from IEA and similar agencies as well as "paper oil" -- future contracts which are settled in dollars.
This is the reality of "casino capitalism" ( aka neoliberalism ) with its rampant and destructive financialization.
For the list of top articles see Recommended Links section
Apr 11, 2019 | discussion.theguardian.com
FionaMcW , 11 Apr 2019 06:36Schools are teaching to the test. As someone who recently retrained as a secondary science teacher - after nearly 30 years as a journalist - I know this to be true.Olympia1881 -> Centrecourt , 11 Apr 2019 05:46Education is a prime example of where neoliberalism has had a negative effect. It worked well when labour was pumping billions into it and they invested in early intervention schemes such as sure start and nursery expansion. Unfortunately under the tories we have had those progressive policies scaled right back. Children with SEND and/or in care are commodities bought and sold by local authorities. I've been working in a PRU which is a private company and it does good things, but I can't help but think if that was in the public sector that it would be in a purpose built building rather than some scruffy office with no playground.DrMidnite , 10 Apr 2019 17:04
The facilities aren't what you would expect in this day in age. If we had a proper functioning government with a plan then what happens with vulnerable children would be properly organised rather than a reactive shit show."Schools teach to the test, depriving children of a rounded and useful education."
Boy do they. I work in Business/IT training and as the years have rolled on I and every colleague I can think of have noticed more and more people coming to courses that they are unfit for. Not because they are stupid, but because they have been taught to be stupid. So used to being taught to the test that they are afraid to ask questions. Increasingly I get asked "what's the right way to do...", usually referring to situation in which there is no right way, just a right way for your business, at a specific point in time.
I had the great pleasure of watching our new MD describe his first customer-facing project, which was a disaster, but they "learned" from it. I had to point out to him that I teach the two disciplines involved - businesss analysis and project management - and if he or his team had attended any of the courses - all of which are free to them - they would have learned about the issues they would face, because (astonishingly) they are well-known.
I fear that these incurious adult children are at the bottom of Brexit, Trump and many of the other ills that afflict us. Learning how to do things is difficult and sometimes boring. Much better to wander in with zero idea of what has already been done and repeat the mistakes of the past. I see the future as a treadmill where the same mistakes are made repetitively and greeted with as much surprise as if they had never happened before. We have always been at war with Eastasia...
Jun 23, 2019 | discussion.theguardian.com
1Byron , 5 Mar 2012 17:44It's no wonder the US is so screwed up these days. Somehow the NeoCons, before and after stealing the 2,000 election for Bush, with the help of abundance of Liars 4 Hire think tanks like CATO, CEI, AEI, Heritage Foundation blah, blah, blah, bankrolled by the likes of the Koch Bros, The Scaifes, Exxon, Monsanto, Dow, Dupont the Nuke Industry etc. were, and are still able to convince low intelligence people that wrong is right, bad is good, meanness is "compassion" and abuse is "tough love".
But it only works if those being duped are already predisposed to hateful philosophy, and that they got in spades with careful conditioning (brainwashing) from bastards like Rush Limbaugh and Rupert Murdoch, people with no moral scruples whatsoever.
Thus the right today (actually for a long while now) is no more than a collection of racists and bigots, pathological liars and scammers, charlatans and greedmeisters.
It's why they care nothing for the poor, nothing for protection the environment, nothing for anyone or anything but themselves. They are the cult of mean.
As former right-wing operative Allen Raymond famously said: "this is not about morality, this is about winning"
Dec 27, 2018 | finance.yahoo.com
The hard reality remains that the financial markets are, in the long term, forward-looking. But in the short-term, they are dominated by high-speed electronic trading.
Anyone who felt Monday's (December's, Q4's) meltdown, or watched Tuesday night's reopening of equity index futures, watched in entertained astonishment, if not anguish.
Clearly, sentient, reasoned thought has now been sacrificed at the altar of short-term profit. The task is to come up with a thesis moving forward, and the challenge is to stick to that conclusion at times when the evils of algorithmic, high-frequency and passive trading styles turn against those core beliefs. Risk Management. Before one might profit with sustained regularity, one must learn to effectively preserve one's capital.
just so 5 hours agoYou can have whatever opinion you want about Yahoo's reporting of the daily ups and downs of the markets, and keep in mind, the exchanges are betting parlors. That said, these types of wild swings over the last 6 weeks or so, are very similar to what took place before housing bubble burst in the late mid-ots, keep an eye on the amount of private uncollateralized debt that mid-cap companies are carrying, if they start defaulting and these private equity houses start running for cover, it create the same type of liquidity situation that Lehman's caused.
Jun 16, 2019 | www.theamericanconservative.com
The evidence suggests that foreign policymakers do not seek insight from scholars, but rather support for what they already want to do.
As Desch quotes a World War II U.S. Navy anthropologist, "the administrator uses social science the way the drunk uses a lamppost, for support rather than illumination." Scholars' disinclination to be used in this way helps explain more of the distance.
Jun 21, 2019 | dissidentvoice.org
A Slow Death: The Ills of the Neoliberal Academic
by Binoy Kampmark / June 20th, 2019Any sentient being should be offended. Eventually, the Neoliberalization of the academic workforce was bound to find lazy enthusiasts who neither teach, nor understand the value of a tenured position dedicated to that musty, soon-to-be-forgotten vocation of the pedagogue. It shows in the designs of certain universities who confuse frothy trendiness with tangible depth: the pedagogue banished from the podium, with rooms lacking a centre, or a focal point for the instructor. Not chic, not cool, we are told, often by learning and teaching committees that perform neither task. Keep it modern; do not sound too bright and hide the learning: we are all equal in the classroom, inspiringly even and scrubbed of knowledge. The result is what was always to be expected: profound laziness on the part of instructors and students, dedicated mediocrity, and a rejection of all things intellectually taxing.
Neoliberalization, a word that says much in, and of, itself, is seen as analogue of broader outsourcing initiatives. Militaries do it, governments do it, and the university does it. Services long held to be the domain of the state, itself an animation of the social contract, the spirit of the people, have now become the incentive of the corporate mind, and, it follows, its associated vices. The entire scope of what has come to be known as outsourcing is itself a creature of propaganda, cheered on as an opportunity drawing benefits rather than an ill encouraging a brutish, tenuous life.
One such text is Douglas Brown and Scott Wilson's The Black Book of Outsourcing . Plaudits for it resemble worshippers at a shrine planning kisses upon icons and holy relics. "Brown & Wilson deliver on the best, most innovative, new practices all aimed at helping one and all survive, manage and lead in this new economy," praises Joann Martin, Vice President of Pitney Bowes Management Services. Brown and Wilson take aim at a fundamental "myth": that "Outsourcing is bad for America." They cite work sponsored by the Information Technology Association of America (of course) that "the practice of outsourcing is good for the US economy and its workers."
Practitioners and policy makers within the education industry have become devotees of the amoral dictates of supply and demand, underpinned by an insatiable management class. Central to their program of university mismanagement is the neoliberal academic, a creature both embraced and maligned in the tertiary sectors of the globe.
The neoliberal academic is meant to be an underpaid miracle worker, whose divining acts rescue often lax academics from discharging their duties. (These duties are outlined in that deceptive and unreliable document known as a "workplan", as tedious as it is fictional.) The neoliberal academic grades papers, lectures, tutors and coordinates subjects. The neoliberal provides cover, a shield, and an excuse for a certain class of academic manager who prefers the calling of pretence to the realities of work.
Often, these neoliberal academics are students undertaking a postgraduate degree and subject to inordinate degrees of stress in an environment of perennial uncertainty. The stresses associated with such students are documented in the Guardian's Academics Anonymous series and have also been the subject of research in the journal Research Policy . A representative sample of PhD students studying in Flanders, Belgium found that one in two experienced psychological distress, with one in three at risk of a common psychiatric disorder. Mental health problems tended to be higher in PhD students "than in the highly educated general population, highly education employees and higher education students."
This is hardly helped by the prospects faced by those PhDs for future permanent employment, given what the authors of the Research Policy article describe as the "unfavourable shift in the labour-supply demand balance, a growing popularity of short-term contracts, budget cuts and increased competition for research sources".
There have been a few pompom holders encouraging the Neoliberalization mania, suggesting that it is good for the academic sector. The explanations are never more than structural: a neoliberal workforce, for instance, copes with fluctuating enrolments and reduces labour costs. "Using neoliberal academics brings benefits and challenges," we find Dorothy Wardale, Julia Richardson and Yuliani Suseno telling us in The Conversation . This, in truth, is much like suggesting that syphilis and irritable bowel syndrome is necessary to keep you on your toes, sharp and streamlined. The mindset of the academic-administrator is to assume that such things are such (Neoliberalization, the authors insist, is not going way, so embrace) and adopt a prostrate position in the face of funding cuts from the public purse.
Neoliberalization can be seen alongside a host of other ills. If the instructor is disposable and vulnerable, then so are the manifestations of learning. Libraries and research collections, for instance, are being regarded as deadening, inanimate burdens on the modern, vibrant university environment. Some institutions make a regular habit of culling their supply of texts and references: we are all e-people now, bound to prefer screens to paper, the bleary-eyed session of online engagement to the tactile session with a book.
The neoliberal, sessional academic also has, for company, the "hot-desk", a spot for temporary, and all too fleeting occupation. The hot-desk has replaced the work desk; the partitions of the office are giving way to the intrusions of the open plan. The hot-desker, like coitus, is temporary and brief. The neoliberal academic epitomises that unstable reality; there is little need to give such workers more than temporary, precarious space. As a result, confidentiality is impaired, and privacy all but negated. Despite extensive research showing the negative costs of "hot-desking" and open plan settings, university management remains crusade bound to implement such daft ideas in the name of efficiency.
Neoliberalization also compounds fraudulence in the academy. It supplies the bejewelled short cut route, the bypass, the evasion of the rigorous things in learning. Academics may reek like piddling middle class spongers avoiding the issues while pretending to deal with them, but the good ones at least make some effort to teach their brood decently and marshal their thoughts in a way that resembles, at the very least, a sound whiff of knowledge. This ancient code, tested and tried, is worth keeping, but it is something that modern management types, along with their parasitic cognates, ignore. In Australia, this is particularly problematic, given suggestions that up to 80 percent of undergraduate courses in certain higher learning institutions are taught by neoliberal academics.
The union between the spread sheet manager and the uninterested academic who sees promotion through the management channel rather than scholarship, throws up a terrible hybrid, one vicious enough to degrade all in its pathway. This sort of hybrid hack resorts to skiving and getting neoliberals to do the work he or she ought to be doing. Such people co-ordinate courses but make sure they get the wallahs and helpers desperate for cash to do it. Manipulation is guaranteed, exploitation is assured.
The economy of desperation is cashed in like a reliable blue-chip stock: the skiver with an ongoing position knows that a neoliberal academic desperate to earn some cash cannot dissent, will do little to rock the misdirected boat, and will have to go along with utterly dotty notions. There are no additional benefits from work, no ongoing income, no insurance, and, importantly, inflated hours that rarely take into account the amount of preparation required for the task.
The ultimate nature of the Neoliberalization catastrophe is its diminution of the entire academic sector. Neoliberals suffer, but so do students. The result is not mere sloth but misrepresentation of the worst kind: the university keen to advertise a particular service it cannot provide sufficiently. This, in time, is normalised: what would students, who in many instances may not even know the grader of their paper, expect? The remunerated, secure academic-manager, being in the castle, can raise the drawbridge and throw the neoliberals to the vengeful crowd, an employment environment made safe for hypocrisy.
Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne and can be reached at: email@example.com . Read other articles by Binoy .
This article was posted on Thursday, June 20th, 2019 at 9:00pm and is filed under Neoliberalization , Education , Universities .
Jun 18, 2019 | www.sciencemag.org
A Dutch engineering university is taking radical action to increase its share of female academics by opening job vacancies to women only. Starting on 1 July, the Eindhoven University of Technology (TUE) in the Netherlands will not allow men to apply for permanent academic jobs for the first 6 months of the recruitment process under a new fellowship program. If no suitable applicant has been found within that time, men can then apply, but the selection committee will still have to nominate at least one candidate of each gender. The [insane] plan was announced today and is already attracting controversy.
Jun 21, 2019 | thefreethoughtproject.com
Portland, OR -- A former top level Walt Disney executive was sentenced to prison this month for nearly seven years for child rape. Michael Laney, 73, who was the Vice President of Walt Disney was found guilty of four counts of first-degree sexual abuse and sentenced to 81 months in prison.
After the sentencing, Laney's attorneys pleaded with the judge to suspend the sentence, claiming that Laney's wife would suffer if her husband goes to jail.
According to Oregon Live , Laney's wife's doctor, Blain Crandell, submitted a letter on Laney's behalf, saying his wife "could be expected to suffer serious consequences to her health and well-being" without an in-home caregiver, a role her husband had been filling.
Thankfully, the judge and district attorney did not see it that way. In response to this request, Multnomah County Deputy District Attorney Charles Mickley called the claims "peculiarly offensive and insulting."
"Defendant wholly ignores the compelling evidence of his guilt presented at trial, including the evidence of his longstanding sexual interest in children," Mickley wrote.
Laney will also have to serve an additional 120 months of probation after prison, pay a $4,000 fine, and register as a sex offender.
... ... ...
This article originally appeared on The Free Thought Project .Matt Agorist Matt Agorist is an honorably discharged veteran of the USMC and former intelligence operator directly tasked by the NSA. This prior experience gives him unique insight into the world of government corruption and the American police state. Agorist has been an independent journalist for over a decade and has been featured on mainstream networks around the world. Agorist is also the Editor at Large at the Free Thought Project. Follow @MattAgorist on Twitter , Steemit , and now on Minds.
- PurpleCarrot 8h
Pedophilia is the link between all these Hollyweird freaks and politics as well. I believe they are all lured into being compromised and dirt kept on them all collectively, in order to use them and manipulate them and gain control over society.
May 02, 2019 | dissidentvoice.orgIn 2017, Sociology Professor Rachel Sherman wrote Uneasy Street: The Anxiety of Affluence , a book which drew upon 50 in-depth interviews with Uber-wealthy New Yorkers in order to obtain a picture of just how they perceived their status.
Sherman found that her interviewees, all in the top 1-2 percent of income or wealth or both, had thoroughly imbibed the narrative of meritocracy to rationalize their affluence and immense privileges. That is, they believed they deserved all their money because of hard work and individual effort. Most identified themselves as socially and political liberal and took pains to distinguish themselves from "bad" rich people who flaunt their wealth. Although one unselfconsciously acknowledged "I used to say I was going to be a revolutionary but then I had my first massage."
One striking characteristic was that these folks never talk about money and obsess over the "stigma of privilege." One typical respondent whose wealth exceeded $50 million told Sherman, "There's nobody who knows how much money we spend. You're the only person I've ever said the numbers to out-loud." Another couple who had inherited $50 million and lived in a penthouse had the post office change their mailing address to the floor number because PH sounded "elite and snobby." Another common trait was removing the price tags from items entering the house so the housekeeper and and staff didn't see them. As if the nanny didn't know
Her subjects (who remained anonymous) readily acknowledged being extremely advantaged but remained "good people, normal people," who work hard, are careful about ostentatious consumption, and above all, "give back." They spend considerable time trying to legitimate inequality and Sherman concludes they've largely succeeded in feeling "morally worthy."
As a follow-up to this study, Prof. Sherman has been conducting similar in-depth interviews with young people whose parents or ancestors accumulated sizable fortunes, wealth they now have or will soon inherit. Sherman's recent piece, "The Rich Kid Revolution," ( The New York Times , 4/28/19) reveals a stark contrast in self-perception from her earlier findings.
First, her interviewees totally "get" the lie of meritocracy as they ruefully skewer family myths about individual effort, scrimping and saving and the origins of wealth. One young woman who's in line to inherit a considerable fortune told Sherman, "My dad has always been a CEO, and it was clear to me that he spent a lot of time at work, but it has never been clear to me that he worked a lot harder than a domestic worker, for example. I will never believe that."
Sherman discovered that whether the immense fortunes came from "the direct dispossession of indigenous people, enslavement of African-Americans, production of fossil fuels or obvious exploitation of workers, they often express especially acute guilt." One response has been that some wealthy people under age 35 have formed organizations to fund social justice initiatives.
Second, many of her respondents have read about racialized capitalism and harbor no illusions about their own success. From access to the "right" schools and acquiring cultural capital to social networking and good, high paying jobs, they readily acknowledged that it's all derived from their class (and race) privilege. Third, they are convinced the economic system is "immoral," equality of opportunity does not exist and their wealth and privileges are absolutely "unearned." Finally, they grasp, often from personal observation, that traditional philanthropy is primarily about keeping those at the top in place, obtaining generous tax breaks and treating symptoms while ignoring the causes rooted in the very social structures from which they benefit.
Beyond the article's hyperbolic title and a certain vagueness about where this new consciousness may lead, the piece -- whether intentionally or not -- does raise issues that demand much wider public discussion.
First, a note about philanthro-capitalism or as Peter Buffet (Warren Buffet's son) terms it, "conscience laundering." In Chris Rock's pithy phrase, "Behind every fortune is a great crime" and given what we know about the sources of great wealth -- the collectivity -- these monies should be supporting public needs that are democratically determined not the cherry-picked, pet projects of billionaires. And this reveals another motive behind private charity: the desire to stifle any enthusiasm for an activist government responsible to the public will.
I should add that whenever I hear a philanthropist piously proclaim, "I just wanted to give something back," my first impulse is to shout "Why not give it all back?" That is, I've always been partial to the moral injunction, "For unto whomsoever much is given, of him shall much be required" (Luke 12:48). And although I won't attempt to improve on scripture, I might suggest "From whom much is taken, much is owed."
Second, one might ask about the case where a person of modest means succeeds at something and accumulates a fortune? We've all heard or read ad infinitum, someone exclaim, "Damn it! Nobody even handed me anything. I did it all on my own. I'm entirely self-made." Isn't that evidence of individual merit? No. For starters, as Chuck Collins, heir to the Oscar Mayer fortune, once put it, "Where would wealthy entrepreneurs be without taxpayer investments in the Internet, transportation, public education, the legal system, the human genome project and so on?" Herbert Simon, a Nobel Prize winner in Economics, has calculated the societal contribution at ninety percent of what people earn in Northwest Europe and the United States.
In addition to the sources mentioned above, just off the top of my head I can list many other factors that belie this powerfully seductive but wholly fictional narrative, one that's also touted to and embraced by many members of the working class: Child labor, Chinese and Irish immigrant labor (railroads), eminent domain, massacres of striking workers, state repression of unions, Immigration Act of 1864, public land grabs, corporate welfare, installing foreign dictators to guarantee cheap labor and resources, inheritance laws, public schools and universities, public expense mail systems, property and contract laws, government tax breaks incentives to business, Securities and Exchange Commission to ensure trust in the stock market, the U.S. military, and a police state to keep the rabble from picking up pitchforks. Another factor that almost merits its own paragraphs is pure luck. By any objective criteria, we can conclude that absent this arrangement there would be no accumulation of private wealth.
Finally, meritocracy is the classic American foundation myth and provides the basis for an entire array of other fairy tales. Foremost, this illusion serves to justify policies that foster economic inequality and hinder the development of social movements. After so many decades of neoliberal ideology, this lie is now firmly lodged in the public's collective consciousness but I'm convinced that with effort and relying on the evidence, it can be expunged.
Gary Olson is Professor Emeritus of Political Science at Moravian College, Bethlehem, PA. He can be reached at: firstname.lastname@example.org . Read other articles by Gary .
This article was posted on Thursday, May 2nd, 2019 at 2:22pm and is filed under Economic Inequality , Meritocracy , Opinion .
Jun 19, 2019 | oilprice.com
One of the first major confrontations with the US by Russia and the PRC was to be over the greater Middle East. The main reason was the advance negotiations with all key oil producers -- including Saudi Arabia, Iraq, and Iran -- on substituting the petrodollar with a basket of currencies where the yuan , the euro and the ruble dominate. Using the currency basket would enable the sellers and buyers to go around the US-imposed sanctions and quotas. Indeed, Beijing and Moscow were now enticing the oil producers with huge, long-term export deals which were both financially lucrative and politically tempting by offering guarantees for the well-being of the participating governments.
The crux of the proposal is regional and includes flagrant disregard of the US sanctions on Iran.
However, the key to the extent of the commitment of both Beijing and Moscow lies in the growing importance and centrality of the New Silk Road via Central Asia.
Persia had a crucial rôle in the ancient Silk Road, and both the PRC and Russia now expect Iran to have a comparable key rôle in the New Silk Road.
The growing dominance of heritage-based dynamics throughout the developing world, including the greater Central Asia and the greater Middle East, makes it imperative for the PRC to rely on historic Persia/Iran as a western pole of the New Silk Road. It is this realization which led both Beijing and Moscow to give Tehran, in mid-May 2019, the original guarantees that Washington would be prevented from conducting a "regime change".
Therefore, even though both Russia and the PRC were not satisfied with the Iranian and Iran-proxy activities and policies in the Iraq-Syria-Lebanon area, it was far more important for them to support Iran, and also Turkey, in their confrontations with the US in order to expedite the consolidation of the New Silk Road.
Tehran and its key allies in "the Middle Eastern Entente" -- Turkey and Qatar -- are cognizant of the core positions of Russia and the PRC. Since mid-May, Tehran and, to a lesser extent, Ankara and Doha, were appraised by Moscow and Beijing of their overall direction of political decisions. Hence, since early June 2019, Tehran has felt confident to start building momentum of Iranian assertiveness and audacity.
Tehran has been raising its profile in the region.
Tehran insists that it is now impossible to make decisions, or do anything else, in the greater Middle East without Iran's approval. On June 2, 2019, the Chief of Staff of the Iranian Armed Forces, Maj.-Gen. Mohammad Bagheri, touted the new strategic posture of Iran. "The Islamic movement has affected the entire world and on top of that, it has succeeded in intimidating the American hegemony and Zionism," he said. Bagheri attributed the new influence of Iran to the acquisition of regional strategic depth; that is, reaching the shores of the Mediterranean
Mamdouh Salamehon June 18 2019
Some quarters in the West belittle the strategic partnership between China and Russia describing it as a “marriage of convenience”. They even had the temerity to urge President Putin to make a choice between China and the West.
President Putin will never sacrifice his strategic partnership with China for the West. Both Russia and China rank their ties as the “peak” in mutual history. This can be judged by two analytical frameworks: their converging visions of the future world order and their harmonized national interests.
The Chinese view on the world order at this historical juncture is shared and dovetailed by Putin’s Russia. Both sides hold the view that Washington’s alienation from both Beijing and Moscow is reflected by the deeply rooted fear of the US losing hegemonic status as the “only indispensable superpower”. The indications of the US fear are plenty. From Beijing’s point of view, they manifest themselves by the U.S. decision to restart a Cold War containment strategy of China and by the trade war it is waging against it. From Moscow’s perspective, US fears manifest themselves by the US attempts to undermine Russia’s dominance in global energy and also by the Western alliance pushing the Western sphere of influence towards the Russian border.
In sharp contrast to mutual suspicion and deteriorating relationship between Washington and Beijing, the Chinese-Russian tie has proved to be a stable strategic partnership built on mutual understanding, respect and national interests.
The Russia-China strategic alliance is destined to shape the global economy and the geopolitics of the world in the 21st century converting it from a unipolar to a multipolar world.
Relations between China, the world’s largest economy based on purchasing power parity (PPP) and Russia, the world’s energy superpower, are deepening at a time of profound change in the global geopolitical landscape.
Their tools are the petro-yuan and the Silk Road better known as the Belt & Road Initiative (BRI).
The 26th of March 2018 will go in history as the most momentous day for the United States’ economy, China’s economy and the petrodollar and also for China’s status as an economic superpower. In that day China launched its yuan-denominated crude oil futures in Shanghai thus challenging the petrodollar for dominance in the global oil market.
Right now, China is the number one exporter on the globe, the largest crude oil importer in the world and also the world’s biggest economy. The Chinese would like to see global currency usage reflect this shift in global economic power. The petrodollar system provides at least three immediate benefits to the United States. It increases global demand for US dollars. It also increases global demand for US debt securities and it gives the United States the ability to buy oil with a currency it can print at will. In geopolitical terms, the petrodollar lends vast economic and political power to the United States. China hopes to replicate this dynamic.
The launching of the crude oil benchmark on the Shanghai exchange could mark the beginning of the end of the petrodollar. It is probable that the Chinese yuan will emerge as the world’s top reserve currency within the next fifteen years with the petro-yuan emerging as the top oil currency.
Another tool of the Russian-Chinese strategic partnership is BRI. The BRI is a massive undertaking involving investments programmes worth trillions of dollars, which will go toward connecting Asia and Europe by sea, rail, and road to promote more trade between the continents.
And with tensions escalating between Iran and the United States, Iran figures prominently in the Russia-China strategic partnership. It is an important link in the BRI. Moreover, Iran has recently become more confident in its ability to confront the United States by the joint guarantees of support it received from Russia and China in the event the US moved to strangle it and attempt a regime change. Iran’s understanding is that were the US to take military action against it, Russia and China would prevent an Iranian defeat even if there were major setbacks.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Jun 19, 2019 | www.nakedcapitalism.com
Yves here. This post describes how the forces driving the US suicide surge started well before the Trump era, but explains how Trump has not only refused to acknowledge the problem, but has made matters worse.
However, it's not as if the Democrats are embracing this issue either.
BY Rajan Menon, the Anne and Bernard Spitzer Professor of International Relations at the Powell School, City College of New York, and Senior Research Fellow at Columbia University's Saltzman Institute of War and Peace Studies. His latest book is The Conceit of Humanitarian Intervention Originally published at TomDispatch .
We hear a lot about suicide when celebrities like Anthony Bourdain and Kate Spade die by their own hand. Otherwise, it seldom makes the headlines. That's odd given the magnitude of the problem.
In 2017, 47,173 Americans killed themselves. In that single year, in other words, the suicide count was nearly seven times greater than the number of American soldiers killed in the Afghanistan and Iraq wars between 2001 and 2018.
A suicide occurs in the United States roughly once every 12 minutes . What's more, after decades of decline, the rate of self-inflicted deaths per 100,000 people annually -- the suicide rate -- has been increasing sharply since the late 1990s. Suicides now claim two-and-a-half times as many lives in this country as do homicides , even though the murder rate gets so much more attention.
In other words, we're talking about a national epidemic of self-inflicted deaths.
Anyone who has lost a close relative or friend to suicide or has worked on a suicide hotline (as I have) knows that statistics transform the individual, the personal, and indeed the mysterious aspects of that violent act -- Why this person? Why now? Why in this manner? -- into depersonalized abstractions. Still, to grasp how serious the suicide epidemic has become, numbers are a necessity.
According to a 2018 Centers for Disease Control study , between 1999 and 2016, the suicide rate increased in every state in the union except Nevada, which already had a remarkably high rate. In 30 states, it jumped by 25% or more; in 17, by at least a third. Nationally, it increased 33% . In some states the upsurge was far higher: North Dakota (57.6%), New Hampshire (48.3%), Kansas (45%), Idaho (43%).
Alas, the news only gets grimmer.
Since 2008 , suicide has ranked 10th among the causes of death in this country. For Americans between the ages of 10 and 34, however, it comes in second; for those between 35 and 45, fourth. The United States also has the ninth-highest rate in the 38-country Organization for Economic Cooperation and Development. Globally , it ranks 27th.
More importantly, the trend in the United States doesn't align with what's happening elsewhere in the developed world. The World Health Organization, for instance, reports that Great Britain, Canada, and China all have notably lower suicide rates than the U.S., as do all but six countries in the European Union. (Japan's is only slightly lower.)
World Bank statistics show that, worldwide, the suicide rate fell from 12.8 per 100,000 in 2000 to 10.6 in 2016. It's been falling in China , Japan (where it has declined steadily for nearly a decade and is at its lowest point in 37 years), most of Europe, and even countries like South Korea and Russia that have a significantly higher suicide rate than the United States. In Russia, for instance, it has dropped by nearly 26% from a high point of 42 per 100,000 in 1994 to 31 in 2019.
We know a fair amount about the patterns of suicide in the United States. In 2017, the rate was highest for men between the ages of 45 and 64 (30 per 100,000) and those 75 and older (39.7 per 100,000).
The rates in rural counties are almost double those in the most urbanized ones, which is why states like Idaho, Kansas, New Hampshire, and North Dakota sit atop the suicide list. Furthermore, a far higher percentage of people in rural states own guns than in cities and suburbs, leading to a higher rate of suicide involving firearms, the means used in half of all such acts in this country.
There are gender-based differences as well. From 1999 to 2017, the rate for men was substantially higher than for women -- almost four-and-a-half times higher in the first of those years, slightly more than three-and-a-half times in the last.
Education is also a factor. The suicide rate is lowest among individuals with college degrees. Those who, at best, completed high school are, by comparison, twice as likely to kill themselves. Suicide rates also tend to be lower among people in higher-income brackets.
The Economics of Stress
This surge in the suicide rate has taken place in years during which the working class has experienced greater economic hardship and psychological stress. Increased competition from abroad and outsourcing, the results of globalization, have contributed to job loss, particularly in economic sectors like manufacturing, steel, and mining that had long been mainstays of employment for such workers. The jobs still available often paid less and provided fewer benefits.
Technological change, including computerization, robotics, and the coming of artificial intelligence, has similarly begun to displace labor in significant ways, leaving Americans without college degrees, especially those 50 and older, in far more difficult straits when it comes to finding new jobs that pay well. The lack of anything resembling an industrial policy of a sort that exists in Europe has made these dislocations even more painful for American workers, while a sharp decline in private-sector union membership -- down from nearly 17% in 1983 to 6.4% today -- has reduced their ability to press for higher wages through collective bargaining.
Furthermore, the inflation-adjusted median wage has barely budged over the last four decades (even as CEO salaries have soared). And a decline in worker productivity doesn't explain it: between 1973 and 2017 productivity increased by 77%, while a worker's average hourly wage only rose by 12.4%. Wage stagnation has made it harder for working-class Americans to get by, let alone have a lifestyle comparable to that of their parents or grandparents.
The gap in earnings between those at the top and bottom of American society has also increased -- a lot. Since 1979, the wages of Americans in the 10th percentile increased by a pitiful 1.2%. Those in the 50th percentile did a bit better, making a gain of 6%. By contrast, those in the 90th percentile increased by 34.3% and those near the peak of the wage pyramid -- the top 1% and especially the rarefied 0.1% -- made far more substantial gains.
And mind you, we're just talking about wages, not other forms of income like large stock dividends, expensive homes, or eyepopping inheritances. The share of net national wealth held by the richest 0.1% increased from 10% in the 1980s to 20% in 2016. By contrast, the share of the bottom 90% shrank in those same decades from about 35% to 20%. As for the top 1%, by 2016 its share had increased to almost 39% .
The precise relationship between economic inequality and suicide rates remains unclear, and suicide certainly can't simply be reduced to wealth disparities or financial stress. Still, strikingly, in contrast to the United States, suicide rates are noticeably lower and have been declining in Western European countries where income inequalities are far less pronounced, publicly funded healthcare is regarded as a right (not demonized as a pathway to serfdom), social safety nets far more extensive, and apprenticeships and worker retraining programs more widespread.
Evidence from the United States , Brazil , Japan , and Sweden does indicate that, as income inequality increases, so does the suicide rate. If so, the good news is that progressive economic policies -- should Democrats ever retake the White House and the Senate -- could make a positive difference. A study based on state-by-state variations in the U.S. found that simply boosting the minimum wage and Earned Income Tax Credit by 10% appreciably reduces the suicide rate among people without college degrees.
The Race Enigma
One aspect of the suicide epidemic is puzzling. Though whites have fared far better economically (and in many other ways) than African Americans, their suicide rate is significantly higher . It increased from 11.3 per 100,000 in 2000 to 15.85 per 100,000 in 2017; for African Americans in those years the rates were 5.52 per 100,000 and 6.61 per 100,000. Black men are 10 times more likely to be homicide victims than white men, but the latter are two-and-half times more likely to kill themselves.
The higher suicide rate among whites as well as among people with only a high school diploma highlights suicide's disproportionate effect on working-class whites. This segment of the population also accounts for a disproportionate share of what economists Anne Case and Angus Deaton have labeled " deaths of despair " -- those caused by suicides plus opioid overdoses and liver diseases linked to alcohol abuse. Though it's hard to offer a complete explanation for this, economic hardship and its ripple effects do appear to matter.
According to a study by the St. Louis Federal Reserve , the white working class accounted for 45% of all income earned in the United States in 1990, but only 27% in 2016. In those same years, its share of national wealth plummeted, from 45% to 22%. And as inflation-adjusted wages have decreased for men without college degrees, many white workers seem to have lost hope of success of any sort. Paradoxically, the sense of failure and the accompanying stress may be greater for white workers precisely because they traditionally were much better off economically than their African American and Hispanic counterparts.
In addition, the fraying of communities knit together by employment in once-robust factories and mines has increased social isolation among them, and the evidence that it -- along with opioid addiction and alcohol abuse -- increases the risk of suicide is strong . On top of that, a significantly higher proportion of whites than blacks and Hispanics own firearms, and suicide rates are markedly higher in states where gun ownership is more widespread.
Trump's Faux Populism
The large increase in suicide within the white working class began a couple of decades before Donald Trump's election. Still, it's reasonable to ask what he's tried to do about it, particularly since votes from these Americans helped propel him to the White House. In 2016, he received 64% of the votes of whites without college degrees; Hillary Clinton, only 28%. Nationwide, he beat Clinton in counties where deaths of despair rose significantly between 2000 and 2015.
White workers will remain crucial to Trump's chances of winning in 2020. Yet while he has spoken about, and initiated steps aimed at reducing, the high suicide rate among veterans , his speeches and tweets have never highlighted the national suicide epidemic or its inordinate impact on white workers. More importantly, to the extent that economic despair contributes to their high suicide rate, his policies will only make matters worse.
The real benefits from the December 2017 Tax Cuts and Jobs Act championed by the president and congressional Republicans flowed to those on the top steps of the economic ladder. By 2027, when the Act's provisions will run out, the wealthiest Americans are expected to have captured 81.8% of the gains. And that's not counting the windfall they received from recent changes in taxes on inheritances. Trump and the GOP doubled the annual amount exempt from estate taxes -- wealth bequeathed to heirs -- through 2025 from $5.6 million per individual to $11.2 million (or $22.4 million per couple). And who benefits most from this act of generosity? Not workers, that's for sure, but every household with an estate worth $22 million or more will.
As for job retraining provided by the Workforce Innovation and Opportunity Act, the president proposed cutting that program by 40% in his 2019 budget, later settling for keeping it at 2017 levels. Future cuts seem in the cards as long as Trump is in the White House. The Congressional Budget Office projects that his tax cuts alone will produce even bigger budget deficits in the years to come. (The shortfall last year was $779 billion and it is expected to reach $1 trillion by 2020.) Inevitably, the president and congressional Republicans will then demand additional reductions in spending for social programs.
This is all the more likely because Trump and those Republicans also slashed corporate taxes from 35% to 21% -- an estimated $1.4 trillion in savings for corporations over the next decade. And unlike the income tax cut, the corporate tax has no end date . The president assured his base that the big bucks those companies had stashed abroad would start flowing home and produce a wave of job creation -- all without adding to the deficit. As it happens, however, most of that repatriated cash has been used for corporate stock buy-backs, which totaled more than $800 billion last year. That, in turn, boosted share prices, but didn't exactly rain money down on workers. No surprise, of course, since the wealthiest 10% of Americans own at least 84% of all stocks and the bottom 60% have less than 2% of them.
And the president's corporate tax cut hasn't produced the tsunami of job-generating investments he predicted either. Indeed, in its aftermath, more than 80% of American companies stated that their plans for investment and hiring hadn't changed. As a result, the monthly increase in jobs has proven unremarkable compared to President Obama's second term, when the economic recovery that Trump largely inherited began. Yes, the economy did grow 2.3% in 2017 and 2.9% in 2018 (though not 3.1% as the president claimed). There wasn't, however, any "unprecedented economic boom -- a boom that has rarely been seen before" as he insisted in this year's State of the Union Address .
Anyway, what matters for workers struggling to get by is growth in real wages, and there's nothing to celebrate on that front: between 2017 and mid-2018 they actually declined by 1.63% for white workers and 2.5% for African Americans, while they rose for Hispanics by a measly 0.37%. And though Trump insists that his beloved tariff hikes are going to help workers, they will actually raise the prices of goods, hurting the working class and other low-income Americans the most .
Then there are the obstacles those susceptible to suicide face in receiving insurance-provided mental-health care. If you're a white worker without medical coverage or have a policy with a deductible and co-payments that are high and your income, while low, is too high to qualify for Medicaid, Trump and the GOP haven't done anything for you. Never mind the president's tweet proclaiming that "the Republican Party Will Become 'The Party of Healthcare!'"
Let me amend that: actually, they have done something. It's just not what you'd call helpful. The percentage of uninsured adults, which fell from 18% in 2013 to 10.9% at the end of 2016, thanks in no small measure to Obamacare , had risen to 13.7% by the end of last year.
The bottom line? On a problem that literally has life-and-death significance for a pivotal portion of his base, Trump has been AWOL. In fact, to the extent that economic strain contributes to the alarming suicide rate among white workers, his policies are only likely to exacerbate what is already a national crisis of epidemic proportions.
Seamus Padraig , June 19, 2019 at 6:46 am
Trump has neglected his base on pretty much every issue; this one's no exception.
DanB , June 19, 2019 at 8:55 am
Trump is running on the claim that he's turned the economy around; addressing suicide undermines this (false) claim. To state the obvious, NC readers know that Trump is incapable of caring about anyone or anything beyond his in-the-moment interpretation of his self-interest.
JCC , June 19, 2019 at 9:25 am
Not just Trump. Most of the Republican Party and much too many Democrats have also abandoned this base, otherwise known as working class Americans.
The economic facts are near staggering and this article has done a nice job of summarizing these numbers that are spread out across a lot of different sites.
I've experienced this rise within my own family and probably because of that fact I'm well aware that Trump is only a symptom of an entire political system that has all but abandoned it's core constituency, the American Working Class.
sparagmite , June 19, 2019 at 10:13 am
Yep It's not just Trump. The author mentions this, but still focuses on him for some reason. Maybe accurately attributing the problems to a failed system makes people feel more hopeless. Current nihilists in Congress make it their duty to destroy once helpful institutions in the name of "fiscal responsibility," i.e., tax cuts for corporate elites.
dcblogger , June 19, 2019 at 12:20 pm
Maybe because Trump is president and bears the greatest responsibility in this particular time. A great piece and appreciate all the documentation.
Svante , June 19, 2019 at 7:00 am
I'd assumed, the "working class" had dissappeared, back during Reagan's Miracle? We'd still see each other, sitting dazed on porches & stoops of rented old places they'd previously; trying to garden, fix their car while smoking, drinking or dazed on something? Those able to morph into "middle class" lives, might've earned substantially less, especially benefits and retirement package wise. But, a couple decades later, it was their turn, as machines and foreigners improved productivity. You could lease a truck to haul imported stuff your kids could sell to each other, or help robots in some warehouse, but those 80s burger flipping, rent-a-cop & repo-man gigs dried up. Your middle class pals unemployable, everybody in PayDay Loan debt (without any pay day in sight?) SHTF Bug-out bags® & EZ Credit Bushmasters began showing up at yard sales, even up North. Opioids became the religion of the proletariat Whites simply had much farther to fall, more equity for our betters to steal. And it was damned near impossible to get the cops to shoot you?
Man, this just ain't turning out as I'd hoped. Need coffee!
Svante , June 19, 2019 at 7:55 am
We especially love the euphemism "Deaths O' Despair." since it works so well on a Chyron, especially supered over obese crackers waddling in crusty MossyOak™ Snuggies®
DanB , June 19, 2019 at 9:29 am
This is a very good article, but I have a comment about the section titled, "The Race Enigma." I think the key to understanding why African Americans have a lower suicide rate lies in understanding the sociological notion of community, and the related concept Emil Durkheim called social solidarity. This sense of solidarity and community among African Americans stands in contrast to the "There is no such thing as society" neoliberal zeitgeist that in fact produces feelings of extreme isolation, failure, and self-recriminations. An aside: as a white boy growing up in 1950s-60s Detroit I learned that if you yearned for solidarity and community what you had to do was to hang out with black people.
Amfortas the hippie , June 19, 2019 at 2:18 pm
" if you yearned for solidarity and community what you had to do was to hang out with black people."
amen, to that. in my case rural black people.
and I'll add Hispanics to that.
My wife's extended Familia is so very different from mine.
Solidarity/Belonging is cool.
I recommend it.
on the article we keep the scanner on("local news").we had a 3-4 year rash of suicides and attempted suicides(determined by chisme, or deduction) out here.
all of them were despair related more than half correlated with meth addiction itself a despair related thing.
ours were equally male/female, and across both our color spectrum.
that leaves economics/opportunity/just being able to get by as the likely cause.
David B Harrison , June 19, 2019 at 10:05 am
What's left out here is the vast majority of these suicides are men.
Christy , June 19, 2019 at 1:53 pm
Actually, in the article it states:
"There are gender-based differences as well. From 1999 to 2017, the rate for men was substantially higher than for women -- almost four-and-a-half times higher in the first of those years, slightly more than three-and-a-half times in the last."
jrs , June 19, 2019 at 1:58 pm
which in some sense makes despair the wrong word, as females are actually quite a bit more likely to be depressed for instance, but much less likely to "do the deed". Despair if we mean a certain social context maybe, but not just a psychological state.
Ex-Pralite Monk , June 19, 2019 at 10:10 am
You lay off the racial slur "cracker" and I'll lay off the racial slur "nigger". Deal?
rd , June 19, 2019 at 10:53 am
Suicide deaths are a function of the suicide attempt rate and the efficacy of the method used. A unique aspect of the US is the prevalence of guns in the society and therefore the greatly increased usage of them in suicide attempts compared to other countries. Guns are a very efficient way of committing suicide with a very high "success" rate. As of 2010, half of US suicides were using a gun as opposed to other countries with much lower percentages. So if the US comes even close to other countries in suicide rates then the US will surpass them in deaths. https://en.wikipedia.org/wiki/Suicide_methods#Firearms
Now we can add in opiates, especially fentanyl, that can be quite effective as well.
The economic crisis hitting middle America over the past 30 years has been quite focused on the states and populations that also tend to have high gun ownership rates. So suicide attempts in those populations have a high probability of "success".
Joe Well , June 19, 2019 at 11:32 am
I would just take this opportunity to add that the police end up getting called in to prevent on lot of suicide attempts, and just about every successful one.
In the face of so much blanket demonization of the police, along with justified criticism, it's important to remember that.
B:H , June 19, 2019 at 11:44 am
As someone who works in the mental health treatment system, acute inpatient psychiatry to be specific, I can say that of the 25 inpatients currently here, 11 have been here before, multiple times. And this is because of several issues, in my experience: inadequate inpatient resources, staff burnout, inadequate support once they leave the hospital, and the nature of their illnesses. It's a grim picture here and it's been this way for YEARS. Until MAJOR money is spent on this issue it's not going to get better. This includes opening more facilities for people to live in long term, instead of closing them, which has been the trend I've seen.
B:H , June 19, 2019 at 11:53 am
One last thing the CEO wants "asses in beds", aka census, which is the money maker. There's less profit if people get better and don't return. And I guess I wouldn't have a job either. Hmmmm: sickness generates wealth.
Jun 19, 2019 | www.unz.com
Early in any psychology course, students are taught to be very cautious about accepting people's reports. A simple trick is to stage some sort of interruption to the lecture by confederates, and later ask the students to write down what they witnessed. Typically, they will misremember the events, sequences and even the number of people who staged the tableaux. Don't trust witnesses, is the message.
Another approach is to show visual illusions, such as getting estimates of line lengths in the Muller-Lyer illusion, or studying simple line lengths under social pressure, as in the Asch experiment, or trying to solve the Peter Wason logic problems, or the puzzles set by Kahneman and Tversky. All these appear to show severe limitations of human judgment. Psychology is full of cautionary tales about the foibles of common folk.
As a consequence of this softening up, psychology students come to regard themselves and most people as fallible, malleable, unreliable, biased and generally irrational. No wonder psychologists feel superior to the average citizen, since they understand human limitations and, with their superior training, hope to rise above such lowly superstitions.
However, society still functions, people overcome errors and many things work well most of the time. Have psychologists, for one reason or another, misunderstood people, and been too quick to assume that they are incapable of rational thought?
Gerd Gigerenzer thinks so.
He is particularly interested in the economic consequences of apparent irrationality, and whether our presumed biases really result in us making bad economic decisions. If so, some argue we need a benign force, say a government, to protect us from our lack of capacity. Perhaps we need a tattoo on our forehead: Diminished Responsibility.
The argument leading from cognitive biases to governmental paternalism -- in short, the irrationality argument -- consists of three assumptions and one conclusion:
1. Lack of rationality. Experiments have shown that people's intuitions are systematically biased.
2. Stubbornness. Like visual illusions, biases are persistent and hardly corrigible by education.
3. Substantial costs. Biases may incur substantial welfare-relevant costs such as lower wealth, health, or happiness.
4. Biases justify governmental paternalism. To protect people from theirbiases, governments should "nudge" the public toward better behavior.
The three assumptions -- lack of rationality, stubbornness, and costs -- imply that there is slim chance that people can ever learn or be educated out of their biases; instead governments need to step in with a policy called libertarian paternalism (Thaler and Sunstein, 2003).
So, are we as hopeless as some psychologists claim we are? In fact, probably not. Not all the initial claims have been substantiated. For example, it seems we are not as loss averse as previously claimed. Does our susceptibility to printed visual illusions show that we lack judgement in real life?
In Shepard's (1990) words, "to fool a visual system that has a full binocular and freely mobile view of a well-illuminated scene is next to impossible" (p. 122). Thus, in psychology, the visual system is seen more as a genius than a fool in making intelligent inferences, and inferences, after all, are necessary for making sense of the images on the retina.
Most crucially, can people make probability judgements? Let us see. Try solving this one:
A disease has a base rate of .1, and a test is performed that has a hit rate of .9 (the conditional probability of a positive test given disease) and a false positive rate of .1 (the conditional probability of a positive test given no disease). What is the probability that a random person with a positive test result actually has the disease?
Most people fail this test, including 79% of gynaecologists giving breast screening tests. Some researchers have drawn the conclusion that people are fundamentally unable to deal with conditional probabilities. On the contrary, there is a way of laying out the problem such that most people have no difficulty with it. Watch what it looks like when presented as natural frequencies:
Among every 100 people, 10 are expected to have a disease. Among those 10, nine are expected to correctly test positive. Among the 90 people without the disease, nine are expected to falsely test positive. What proportion of those who test positive actually have the disease?
In this format the positive test result gives us 9 people with the disease and 9 people without the disease, so the chance that a positive test result shows a real disease is 50/50. Only 13% of gynaecologists fail this presentation.
Summing up the virtues of natural frequencies, Gigerenzer says:
When college students were given a 2-hour course in natural frequencies, the number of correct Bayesian inferences increased from 10% to 90%; most important, this 90% rate was maintained 3 months after training (Sedlmeier and Gigerenzer, 2001). Meta-analyses have also documented the "de-biasing" effect, and natural frequencies are now a technical term in evidence-based medicine (Akiet al., 2011; McDowell and Jacobs, 2017). These results are consistent with a long literature on techniques for successfully teaching statistical reasoning (e.g., Fonget al., 1986). In sum, humans can learn Bayesian inference quickly if the information is presented in natural frequencies.
If the problem is set out in a simple format, almost all of us can all do conditional probabilities.
I taught my medical students about the base rate screening problem in the late 1970s, based on: Robyn Dawes (1962) "A note on base rates and psychometric efficiency". Decades later, alarmed by the positive scan detection of an unexplained mass, I confided my fears to a psychiatrist friend. He did a quick differential diagnosis on bowel cancer, showing I had no relevant symptoms, and reminded me I had lectured him as a student on base rates decades before, so I ought to relax. Indeed, it was false positive.
Here are the relevant figures, set out in terms of natural frequencies
Every test has a false positive rate (every step is being taken to reduce these), and when screening is used for entire populations many patients have to undergo further investigations, sometimes including surgery.
Setting out frequencies in a logical sequence can often prevent misunderstandings. Say a man on trial for having murdered his spouse has previously physically abused her. Should his previous history of abuse not be raised in Court because only 1 woman in 2500 cases of abuse is murdered by her abuser? Of course, whatever a defence lawyer may argue and a Court may accept, this is back to front. OJ Simpson was not on trial for spousal abuse, but for the murder of his former partner. The relevant question is: what is the probability that a man murdered his partner, given that she has been murdered and that he previously battered her.
Accepting the figures used by the defence lawyer, if 1 in 2500 women are murdered every year by their abusive male partners, how many women are murdered by men who did not previously abuse them? Using government figures that 5 women in 100,000 are murdered every year then putting everything onto the same 100,000 population, the frequencies look like this:
So, 40 to 5, it is 8 times more probable that abused women are murdered by their abuser. A relevant issue to raise in Court about the past history of an accused man.
Are people's presumed biases costly, in the sense of making them vulnerable to exploitation, such that they can be turned into a money pump, or is it a case of "once bitten, twice shy"? In fact, there is no evidence that these apparently persistent logical errors actually result in people continually making costly errors. That presumption turns out to be a bias bias.
Gigerenzer goes on to show that people are in fact correct in their understanding of the randomness of short sequences of coin tosses, and Kahneman and Tversky wrong. Elegantly, he also shows that the "hot hand" of successful players in basketball is a real phenomenon, and not a stubborn illusion as claimed.
With equal elegance he disposes of a result I had depended upon since Slovic (1982), which is that people over-estimate the frequency of rare risks and under-estimate the frequency of common risks. This finding has led to the belief that people are no good at estimating risk. Who could doubt that a TV series about Chernobyl will lead citizens to have an exaggerated fear of nuclear power stations?
The original Slovic study was based on 39 college students, not exactly a fair sample of humanity. The conceit of psychologists knows no bounds. Gigerenzer looks at the data and shows that it is yet another example of regression to the mean. This is an apparent effect which arises whenever the predictor is less than perfect (the most common case), an unsystematic error effect, which is already evident when you calculate the correlation coefficient. Parental height and their children's heights are positively but not perfectly correlated at about r = 0.5. Predictions made in either direction will under-predict in either direction, simply because they are not perfect, and do not capture all the variation. Try drawing out the correlation as an ellipse to see the effect of regression, compared to the perfect case of the straight line of r= 1.0
What diminishes in the presence of noise is the variability of the estimates, both the estimates of the height of the sons based on that of their fathers, and vice versa. Regression toward the mean is a result of unsystematic, not systematic error (Stigler,1999).
Gigerenzer also looks at the supposed finding that people are over-confidence in predictions, and finds that it is another regression to the mean problem.
Gigerenzer then goes on to consider that old favourite, that most people think they are better than average, which supposedly cannot be the case, because average people are average.
Consider the finding that most drivers think they drive better than average. If better driving is interpreted as meaning fewer accidents, then most drivers' beliefs are actually true. The number of accidents per person has a skewed distribution, and an analysis of U.S. accident statistics showed that some 80% of drivers have fewer accidents than the average number of accidents (Mousavi and Gigerenzer, 2011)
Then he looks at the classical demonstration of framing, that is to say, the way people appear to be easily swayed by how the same facts are "framed" or presented to the person who has to make a decision.
A patient suffering from a serious heart disease considers high-risk surgery and asks a doctor about its prospects.
The doctor can frame the answer in two ways:
Positive Frame: Five years after surgery, 90% of patients are alive.
Negative Frame: Five years after surgery, 10% of patients are dead.
Should the patient listen to how the doctor frames the answer? Behavioral economists say no because both frames are logically equivalent (Kahneman, 2011). Nevertheless, people do listen. More are willing to agree to a medical procedure if the doctor uses positive framing (90% alive) than if negative framing is used (10% dead) (Moxeyet al., 2003). Framing effects challenge the assumption of stable preferences, leading to preference reversals. Thaler and Sunstein (2008) who presented the above surgery problem, concluded that "framing works because people tend to be somewhat mindless, passive decisionmakers" (p. 40)
Gigerenzer points out that in this particular example, subjects are having to make their judgements without knowing a key fact: how many survive without surgery. If you know that you have a datum which is more influential. These are the sorts of questions patients will often ask about, and discuss with other patients, or with several doctors. Furthermore, you don't have to spin a statistic. You could simply say: "Five years after surgery, 90% of patients are alive and 10% are dead".
Gigerenzer gives an explanation which is very relevant to current discussions about the meaning of intelligence, and about the power of intelligence tests:
In sum, the principle of logical equivalence or "description invariance" is a poor guide to understanding how human intelligence deals with an uncertain world where not everything is stated explicitly. It misses the very nature of intelligence, the ability to go beyond the information given (Bruner, 1973)
The key is to take uncertainty seriously, take heuristics seriously, and beware of the bias bias.
One important conclusion I draw from this entire paper is that the logical puzzles enjoyed by Kahneman, Tversky, Stanovich and others are rightly rejected by psychometricians as usually being poor indicators of real ability. They fail because they are designed to lead people up the garden path, and depend on idiosyncratic interpretations.
For more detail: http://www.unz.com/jthompson/the-tricky-question-of-rationality/
Critics of examinations of either intellectual ability or scholastic attainment are fond of claiming that the items are "arbitrary". Not really. Scholastic tests have to be close to the curriculum in question, but still need to a have question forms which are simple to understand so that the stress lies in how students formulate the answer, not in how they decipher the structure of the question.
Intellectual tests have to avoid particular curricula and restrict themselves to the common ground of what most people in a community understand. Questions have to be super-simple, so that the correct answer follows easily from the question, with minimal ambiguity. Furthermore, in the case of national scholastic tests, and particularly in the case of intelligence tests, legal authorities will pore over the test, looking at each item for suspected biases of a sexual, racial or socio-economic nature. Designing an intelligence test is a difficult and expensive matter. Many putative new tests of intelligence never even get to the legal hurdle, because they flounder on matters of reliability and validity, and reveal themselves to be little better than the current range of assessments.
In conclusion, both in psychology and behavioural economics, some researchers have probably been too keen to allege bias in cases where there are unsystematic errors, or no errors at all. The corrective is to learn about base rates, and to use natural frequencies as a guide to good decision-making.
Don't bother boosting your IQ. Boost your understanding of natural frequencies.
res , says: June 17, 2019 at 3:29 pm GMTGood concrete advice. Perhaps even more useful for those who need to explain things like this to others than for those seeking to understand for themselves.ThreeCranes , says: June 17, 2019 at 3:34 pm GMT"intelligence deals with an uncertain world where not everything is stated explicitly. It misses the very nature of intelligence, the ability to go beyond the information given (Bruner, 1973)"Tom Welsh , says: June 18, 2019 at 8:36 am GMT
"The key is to take uncertainty seriously, take heuristics seriously, and beware of the bias bias."
Why I come to Unz.@Cortes Sounds fishy to me.Biff , says: June 18, 2019 at 10:16 am GMT
Actually I think this is an example of an increasingly common genre of malapropism, where the writer gropes for the right word, finds one that is similar, and settles for that. The worst of it is that readers intuitively understand what was intended, and then adopt the marginally incorrect usage themselves. That's perhaps how the world and his dog came to say "literally" when they mean "figuratively". Maybe a topic for a future article?In 2009 Google finished engineering a reverse search engine to find out what kind of searches people did most often. Seth Davidowitz and Steven Pinker wrote a very fascinating/entertaining book using the tool called Everybody Liesdearieme , says: June 18, 2019 at 11:25 am GMT
Everybody Lies offers fascinating, surprising, and sometimes laugh-out-loud insights into everything from economics to ethics to sports to race to sex, gender, and more, all drawn from the world of big data. What percentage of white voters didn't vote for Barack Obama because he's black? Does where you go to school effect how successful you are in life? Do parents secretly favor boy children over girls? Do violent films affect the crime rate? Can you beat the stock market? How regularly do we lie about our sex lives, and who's more self-conscious about sex, men or women?
Investigating these questions and a host of others, Seth Stephens-Davidowitz offers revelations that can help us understand ourselves and our lives better. Drawing on studies and experiments on how we really live and think, he demonstrates in fascinating and often funny ways the extent to which all the world is indeed a lab. With conclusions ranging from strange-but-true to thought-provoking to disturbing, he explores the power of this digital truth serum and its deeper potential – revealing biases deeply embedded within us, information we can use to change our culture, and the questions we're afraid to ask that might be essential to our health – both emotional and physical. All of us are touched by big data every day, and its influence is multiplying. Everybody Lies challenges us to think differently about how we see it and the world.I shall treat this posting (for which many thanks, doc) as an invitation to sing a much-loved song: everybody should read Gigerenzer's Reckoning with Risk. With great clarity it teaches what everyone ought to know about probability.Anon  • Disclaimer , says: June 18, 2019 at 3:47 pm GMT
(It could also serve as a model for writing in English about technical subjects. Americans and Britons should study the English of this German – he knows how, you know.)
Inspired by "The original Slovic study was based on 39 college students" I shall also sing another favorite song. Much of Psychology is based on what small numbers of American undergraduates report they think they think." Gigerenzer points out that in this particular example, subjects are having to make their judgements without knowing a key fact: how many survive without surgery. "Cortes , says: June 18, 2019 at 4:14 pm GMT
This one reminds of the false dichotomy. The patient has additional options! Like changing diet, and behaviours such as exercise, elimination of occupational stress , etc.
The statistical outcomes for a person change when the person changes their circumstances/conditions.@Tom Welsh A disposition (conveyance) of an awkwardly shaped chunk out of a vast estate contained reference to "the slither of ground bounded on or towards the north east and extending two hundred and twenty four meters or thereby along a chain link fence " Not poor clients (either side) nor cheap lawyers. And who never erred?Tom Fix , says: June 18, 2019 at 4:25 pm GMT
Better than deliberately inserting "errors" to guarantee a stream of tidy up work (not unknown in the "professional" world) in future.Good article. 79% of gynaecologists fail a simple conditional probability test?! Many if not most medical research papers use advanced statistics. Medical doctors must read these papers to fully understand their field. So, if medical doctors don't fully understand them, they are not properly doing their job. Those papers use mathematical expressions, not English. Converting them to another form of English, instead of using the mathematical expressions isn't a solution.SafeNow , says: June 18, 2019 at 5:49 pm GMTRegarding witnesses: When that jet crashed into Rockaway several years ago, a high percentage of witnesses said that they saw smoke before the crash. But there was actually no smoke. The witnesses were adjusting what they saw to conform to their past experience of seeing movie and newsreel footage of planes smoking in the air before a crash. Children actually make very good witnesses.Anon  • Disclaimer , says: June 18, 2019 at 9:48 pm GMT
Regarding the chart. Missing, up there in the vicinity of cancer and heart disease. The third-leading cause of death. 250,000 per year, according to a 2016 Hopkins study. Medical negligence.Curmudgeon , says: June 19, 2019 at 1:42 am GMT
1. Lack of rationality. Experiments have shown that people's intuitions are systematically biased.
2. Stubbornness. Like visual illusions, biases are persistent and hardly corrigible by education.
3. Substantial costs. Biases may incur substantial welfare-relevant costs such as lower wealth, health, or happiness.
4. Biases justify governmental paternalism. To protect people from theirbiases, governments should "nudge" the public toward better behavior.
Well the sad fact is that there's nobody in the position to protect "governments" from their own biases, and "scientists" from theirs.
So, behind the smoke of all words and rationalisations, the law is unchanged: everyone strives to gain and exert as much power as possible over as many others as possible. Most do that without writing papers to say it is right, others write papers, others books. Anyway, the fundamental law would stay as it is even if all this writing labour was spared, wouldn't it? But then another fundamental law, the law of framing all one's drives as moral and beneffective comes into play the papers and the books are useful, after all.An interesting article. However, I think that the only thing we have to know about how illogical psychiatry is this:Paul2 , says: June 19, 2019 at 8:08 am GMT
In 1973, the American Psychiatric Association (APA) asked all members attending its convention to vote on whether they believed homosexuality to be a mental disorder. 5,854 psychiatrists voted to remove homosexuality from the DSM, and 3,810 to retain it.
The APA then compromised, removing homosexuality from the DSM but replacing it, in effect, with "sexual orientation disturbance" for people "in conflict with" their sexual orientation. Not until 1987 did homosexuality completely fall out of the DSM.
(source https://www.psychologytoday.com/ca/blog/hide-and-seek/201509/when-homosexuality-stopped-being-mental-disorder )
The article makes no mention of the fact that no "new science" was brought to support the resolution.
It appears that the psychiatrists were voting based on feelings rather than science. Since that time, the now 50+ genders have been accepted as "normal" by the APA. My family has had members in multiple generations suffering from mental illness. None were "cured". I know others with the same circumstances.
How does one conclude that being repulsed by the prime directive of every living organism – reproduce yourself – is "normal"? That is not to say these people are horrible or evil, just not normal. How can someone, who thinks (s)he is a cat be mentally ill, but a grown man thinking he is a female child is not?
Long ago a lawyer acquaintance, referring to a specific judge, told me that the judge seemed to "make shit up as he was going along". I have long held psychiatry fits that statement very well.Thank you for this article. I find the information about the interpretation of statistical data very interesting. My take on the background of the article is this:Dieter Kief , says: June 19, 2019 at 8:22 am GMT
Here we have a real scientist fighting the nonsense spreading from (neoclassical) economics into other realms of science/academia.
Behavioral economics is a sideline by-product of neoclassical micro-economic theory. It tries to cope with experimental data that is inconsistent with that theory.
Everything in neoclassical economics is a travesty. "Rational choice theory" and its application in "micro economics" is false from the ground up. It basically assumes that people are gobbling up resources without plan, meaning or relevant circumstances. Neoclassical micro economic theory is so false and illogical that I would not know where to start in a comment, so I should like to refer to a whole book about it:
Keen, Steve: "Debunking economics".
As the theory is totally wrong it is really not surprising that countless experiments show that people do not behave the way neoclassical theory predicts. How do economists react to this? Of course they assume that people are "irrational" because they do not behave according to their studied theory. (Why would you ever change your basic theory because of some tedious facts?)
We live in a strange world in which such people have control over university faculties, journals, famous prizes. But at least we have some scientists who defend their area of knowledge against the spreading nonsense produced by economists.
The title of the 1st ed. of Keen's book was "Debunking Economics: The Naked Emperor of the Social Sciences" which was simply a perfect title.@Curmudgeon Could it be that you expect psychiatrists in the past to be as rational as you are now?
Would the result have been any different, if members of a 1973 convention of physicists or surgeons would have been asked?
Jun 19, 2019 | www.unz.com
The most optimistic explanation: Trump intends to use immigration as an election issue in 2020. Yet his fecklessness in office will be as unappealing to many voters as the Democrats' extremism. [ Trump Is Vulnerable to Biden on Immigration , by Michael Brendan Dougherty, National Review, June 11, 2019] After all, Trump began his campaign vowing to solve the immigration problem almost exactly four years ago -- but essentially nothing has been done.
Instead, the president has been reduced to asking Mexico to solve our problem for us. He supposedly cut a deal with the Mexican government after threatening tariffs , but even that is in dispute. [ Mexico denies Trump's claim of secret concessions in deal , by Jill Colvin, Colleen Long, and Maria Verza, Associated Press, June 10, 2019] The president left powerful negotiating tools on the side, including, most importantly, a remittance tax . As in his dealings with Congress, the president insists on negotiating from weakness in his dealings with Mexico.
In contrast, in the Middle East the president has been extraordinarily bellicose. In April, the Administration revoked waivers that allowed certain countries to buy oil from Iran without violating U.S. sanctions [ U.S. Won't Renew Sanction Exemptions For Countries Buying Iran's Oil , by Bill Chappell, NPR, April 22, 2019]. In early May, the president imposed new sanctions on Iranian metals, a direct threat to the regime's economic viability. [ Trump sanctions Iranian metals, Tehran's largest non-petroleum-related sources of export revenue , by Amanda Macias, CNBC, May 8, 2019]
Later that month, the president said a fight would mean "the official end of Iran" [ Trump threatens Iran With 'Official End' by Kenneth Walsh, US News and World Report, May 20, 2019].
The "maximum pressure campaign," as it has been called, puts Iran in the position of either accepting a humiliating surrender or striking out where it can [ Maximum pressure on Iran Means Maximum Risk of War , by Ilan Goldenberg, Foreign Policy, June 14, 2019].
This has culminated in Iran's alleged attack on two tankers traveling in the Strait of Hormuz. [ Pompeo Says 'There's No Doubt' Iran Attacked 2 Tankers , by Daniella Cheslow, NPR, June 16, 2019] Congressman Adam Schiff, one of the president's most fervent opponents, agrees Iran is to blame [ Schiff agrees with Trump: 'No question' Iran attacked oil tankers , by Ronn Blitzer, Fox News, June 16, 2019], Senator Tom Cotton (who has a relatively strong immigration policy ) has gone so far as to call for direct military action. [ Senator Tom Cotton Calls For 'Retaliatory Military Strike,' Against Iran After Tanker Attacks, by Benjamin Fearnow, Newsweek, June 16, 2019]
Why Iran would do this is questionable, unless it's just a move of desperation.
But did Iran actually do it? Washington has a credibility gap with the rest of the world and its own people thanks to the disaster of the Iraq War . There were, it turned out, no "Weapons of Mass Destruction." So now many Americans openly question whether Iran attacked these tankers. This includes some MSM reporters who trusted the "intelligence community" when it was attacking Trump but now want an "international investigation of the incident". [ Ben Rhodes, CNN, And Others Purposefully Fuel Pro-Iranian "False Flag Conspiracy Theories After Tanker Attacks , RedState, June 14, 2019]
This is not the same country that re-elected George W. Bush in 2004. The trust in institutions is gone; America is war-weary.
And regardless of who did it, who cares? What American interest is at stake? The Iraq War made the region more unstable ; an Iran War would unleash sectarian warfare all over again. [ Attacking Iran Would Unleash Chaos on the Middle East , by Robert Gaines and Scott Horton, National Interest, June 15, 2019]
We can't even say it's "about the oil" -- the United States is now the world's biggest oil producer and may soon be the world's top exporter [ US will soon threaten to topple Saudi Arabia as the world's top oil exporter: IEA by Tom DiChristopher, CNBC, March 11, 2019]. Who cares about Iran's oil?
There is also a deeper fundamental question. Our country is crumbling. The border is non-existent; entire communities are being overrun. There's something perverse about even entertaining a dangerous and costly military intervention halfway around the world. It's akin to a Roman emperor declaring he will conquer India while barbarians are crossing the Rhine.
President Trump ran on a policy of non-intervention and promised it even after being elected. [ Trump lays out non-interventionist U.S. military policy , by Steve Holland, Reuters, December 6, 2016] He repeatedly pushed back against efforts to get more deeply involved in Syria. He must now resist efforts to get involved in Iran, especially from those who may hint it will win him re-election.
Jun 08, 2019 | www.amazon.com
Anna Faktorovich , December 17, 2018The War for Oil and the New Holocaust
The premise of this book is to say what most of the world's public has probably been thinking since the War on Terror began, or that it is a "war for natural resources -- and that terrorism has little to do with it. Once the military became mechanized, oil quickly became the most sought-after commodity on the planet, and the race for energy was eventually framed as a matter of national security."
John Maszka argues that the "oil conglomerates" are the real "threats to national security". Demonizing "an entire religion" is a repercussion of this policy. My own research in Rebellion as Genre a few years ago also attempted to point out the misuse of the term terrorism in its current application, or as a weapon against one's enemies rather than as a reference to a type of attacks intended to terrorize. Governments that accuse others of terrorism while legitimizing their own "acts of violence" as "retributive" are clearly breaking human rights agreements and their stated commitments to freedom.
Maszka's perspective is of particular interest because he teaches this subject at the Higher Colleges of Technology in Abu Dhabi, and has published widely his criticisms of the War on Terror, including Terrorism and the Bush Doctrine.
Many of the books I have read on terrorism from American supporters of this pro-War on Terror doctrine are troubling in their references to spreading Christianity and other similarly questionable ideologies, so it is refreshing to hear from somebody with a fresh perspective that is more likely to bring about world peace. The preface acknowledges that this book contrasts with the bulk of other books in this field. It also explains that it focuses primarily on two "Islamic militant organizations -- al-Qaeda and the Islamic State".
He explains that perception has a lot to do with who a country is willing to commit violence against, giving the example of Nazis being able to commit violence on Jews in the Holocaust because of this blindness. Thus, violence against Muslims by the West in the past two decade is shown as possibly a new Holocaust where the militaries are carrying out orders because Muslims have been demonized.
Terrorism has historically been the work of a few extremists, or terms like "war" or "revolution" is employed to describe large groups of such fighters; so it is strange that the West has entered the War on Terror with entire Muslim-majority countries, killing so many civilians that it is not a stretch to call these Holocaust-like.
The Islamic State targets Muslims as well, also showing dehumanized traits that are even harder to explain (x-xi). The preface also acknowledges that the author will be using "contractions and anecdotal digressions" as "intentional literary devices", shooing the standard scholarly style (this is troubling for me personally, as I'm allergic to digressions, but at least he tells readers what to expect).
As promised, Chapter One begins with a poet's story about the Tree of Life, then discusses the Boston Marathon bombings from the perspective of the author as he worked in Kyrgyzstan, and goes off on other tangents before reaching this conclusion -- the marathon's bombers were not terrorists: "They had no political aspirations. They weren't attempting to obtain concessions from the government or provoke a reaction. They simply believed that they were 'wave sheaves' -- first fruits of God -- and that they would be instrumental in ushering in the apocalypse" (5).
This conclusion explains the relationship between all of the digressions across this section, so these digressions were necessary to prove this point, and thus are suitable for a scholarly book. And this is exactly the type of logical reasoning that is missing in most of the oratory on terrorism. The entire book similarly uses specific acts of supposed terrorism to explain what really happened and working to understand th motivations of the actors.
Since the author's digressions into his own life are typically very relevant to the subject, they are definitely helpful: "I was stationed in Riyadh at an American military base that was attacked by an al-Qaeda suicide bomber" (135).
It would actually be unethical if Maszka did not explain that he has been personally affected by al-Qaeda in this context; and since he has seen this War as a civilian living in the affected countries and as a member of the military that is attaching these "terrorists", his opinions should be trustworthy for both sides. Given how emotional writing this book with detachment and carefully crafted research must have been for somebody who has been bombed, it is only fitting that the final chapter is called, "The Definition of Insanity."
And here is the final chapter:
"A century after World War I, the great war for oil is still raging, with many of the same fronts as before and also a few new ones. Throughout it all -- whether waged by realists, neoliberals, or neocons -- war has been extremely good for business" (225).
Very powerful words that are justly supported. I would strongly recommend that everybody in the West's militaries who is responsible for making decisions in the War on Terror read this book before they make their next decision. Who are they shooting at? Why? Who is benefiting? Who is dying? Are they committing war crimes as serious as the Nazis? If there is any chance these allegations are true what kind of a military leader can proceed without understanding the explanations that Maszka offers here? This would probably also work well in an advanced graduate class, despite its digressions, it will probably help students write better dissertations on related topics.
Pennsylvania Literary Journal: Fall 2018
Jun 14, 2019 | caucus99percent.com
gjohnsit on Fri, 06/14/2019 - 5:42pm
The Gulf of Credibility - I really cannot begin to fathom how stupid you would have to be to believe that Iran would attack a Japanese oil tanker at the very moment that the Japanese Prime Minister was sitting down to friendly, US-disapproved talks in https://t.co/P1wE1Y886i
-- Craig Murray (@CraigMurrayOrg) June 14, 2019
When the ruling elite wanted a war with Iraq they invented incubator babies and WMD programs that didn't exist. Their inventions were far fetched, but not unbelievable. However, the idea that the paranoid dictator Saddam was just going to hand over his most powerful weapons to religious fanatics that hated his guts, was laughably stupid.
When the ruling elite wanted a war with Libya they invented a genocidal, Viagra-fueled, rape army. Their invention was far fetched, and bit lazy, but you could be forgiven for believing that the Mandarins believed it.
This latest anti-Iran warmongering is just plain stupid. It's as if they don't really care if anyone believes the lies they are telling. For starters, look at the shameless liar who is telling these lies.
You mean "Mr. We Lied, We Cheated, We Stole"? What a disgraceful character... pic.twitter.com/pMtAgKaZcG
-- Brave New World (@ClubBayern) June 13, 2019
Then there are the many problems of their "proof".
Where is the video of the Iranians PLACING explosives & detonating them? Removal would be prudent by any Navy/CG. Also location of explosives is VERY high off waterline ...Weird. It's not a limpet mine, it's a demo charge. Had to be put on by fairly high boat w/ a long gaff/pole https://t.co/3qzB7TrrYv
-- Malcolm Nance (@MalcolmNance) June 14, 2019
The distress call went out at 6 am. So, according to CENTCOM's analysis of this video, they're suggesting that 10 hours after the tanker was hit, the IRGC just casually pulled up to the tanker to remove unexploded limpet mine in broad daylight?!
-- Rosalind Rogers راز (@Rrogerian) June 14, 2019
BREAKING: Owner says Kokuka Courageous tanker crew saw "flying objects" before attack, suggesting ship wasn't damaged by mines.
-- The Associated Press (@AP) June 14, 2019
The Japanese company that owns the ship has refused to cooperate in this false flag mission.But in remarks to Japanese media, the president of the company that owns the ship said the vessel wasn't damaged by a mine. "A mine doesn't damage a ship above sea level," said Yutaka Katada, president of Kokuka Sangyo, the owner and operator of the vessel. "We aren't sure exactly what hit, but it was something flying towards the ship," he said.
When the propaganda begins to fall apart and @realDonaldTrump tries to find another way to start a war to win an election. pic.twitter.com/r8Cp7BNQ7z
-- Bamboozll (@bamboozll) June 14, 2019
Looking at this incident/narrative from any/every angle leaves one to conclude "false flag".
Finally, there is the question of "why"?
What would Iran hope to accomplish by this? I found one establishment source that tried to rationalize.Iran denied responsibility, with Foreign Minister Javad Zarif descending to bazaar-level conspiracy theories involving a false-flag operation by Israel's Mossad.
If you're not inclined to believe the Trump administration – and such skepticism is entirely reasonable – most detectives would still tell you that the most obvious culprit is usually responsible for the crime.
To those seeking logic behind the attacks, though, it may be hard to see why Iran would do this – but that assumes that the regime in Tehran is a rational actor.
The Gulf of Oman attacks are especially hard to explain: targeting Japanese shipping on the very day that Prime Minister Shinzo Abe was meeting Supreme Leader Ali Khamenei on a well-publicized peace mission would seem extraordinarily counterproductive, even for a regime with an almost fanatical commitment to self-harm.
Have you ever noticed that everyone that we want to start a war with is crazy? Regimes that stand solid for generations under hostile conditions are always run by maniacs. You'd think that insanity would prevent them from taking power in the first place, but that seems to only be true with our allies.
As for the "most obvious culprit is usually responsible for the crime" that also happens to be "bazaar-level conspiracy theories involving a false-flag operation by Israel's Mossad". Because Mossad actually does that.
Since the U.S.'s tightening of sanctions has squeezed Iranian oil exports, nobody else's should be allowed to pass through waters within reach of the IRGC.
The Iranians know that these threats, if repeated, can lose their power if not followed with action. The attacks on the tankers, then, can be explained as a demonstration that Khamenei's attack dogs have some teeth.
There is another rationale. If Iran does eventually agree to negotiate with the U.S., it will want to bring some bargaining chips to the table – something it can exchange for the removal of sanctions. In the negotiations over the 2015 nuclear deal, Iran was able to offer the suspension of its nuclear program. It doesn't have that particular chip now, although Tehran has recently threatened to crank up the centrifuges again.
Meanwhile, the regime may have calculated that the only way to secure some kind of negotiating position is blackmail: End the sanctions, or we take out some more tankers, and send oil prices surging.
This almost sounds logical, except for one thing: Iran tried that in 1988 and it didn't work. It only caused the one thing the U.S. was itching for: to kill some Iranians.
Do you think that they've forgotten? Or that the U.S. is less warlike? Oh wait. Iranians are crazy and can't be reasoned with, amirite?
US public radio @NPR does not mention it was Iranians who saved the crew. That's how terrible they are at journalism
-- boomerWithaLandline (@Irene34799239) June 14, 2019
The only real question is, why such a transparent lie? Has the ruling elite gotten lazy or stupid? Or do they think that we are that lazy and stupid? I have an alternative theory .For the last two years, as you've probably noticed, the corporate media have been not so subtly alternating between manufacturing Russia hysteria and Nazi hysteria, and sometimes whipping up both at once. Thus, I've dubbed the new Official Enemy of Freedom "the Putin-Nazis." They don't really make any sense, rationally, but let's not get all hung up on that. Official enemies don't have to make sense. The important thing is, they're coming to get us, and to kill the Jews and destroy democracy and something about Stalin, if memory serves. Putin is their leader, of course. Trump is his diabolical puppet. Julian Assange is well, Goebbels, or something. Glenn Greenwald is also on the payroll, as are countless "useful idiots" like myself, whose job it is to sow division, discord, racism, anti-Semitism, anti-capitalism, anti-Hillaryism, collusion rejectionism, ontological skepticism, and any other horrible thing you can think of.
Their bullsh*t lies have gotten lazy and stupid because real effort isn't required to start a war and kill a lot of people.
WoodsDweller on Fri, 06/14/2019 - 6:18pmI'm going to go with "desperate"Sirena on Fri, 06/14/2019 - 6:31pm
Something's happening to move up the time table, and it isn't the election, we're already in plenty of wars, another one won't help El Trumpo.Who is playing who?TheOtherMaven on Fri, 06/14/2019 - 6:31pm
That is the question, I ask thee? If El Trumpo was going to drain the swamp, why did he take these cretins, Bolton, Pompeo, Haspel, Abrams into his cabinet? Is the tail, wagging the dog as usual?All of the aboveAlligator Ed on Fri, 06/14/2019 - 6:33pm
Lazy, stupid, and desperate.The answer to your title is YES
The elite are both lazy and stupid. Even the Orange Man will not be sucked into another Douma style false flag operation. The reasons why this is a basic false flag is obvious. If anybody reading about this doesn't understand the culprits responsible weren't Iranian, then they should be interviewed for mental competency.
My money, the little that I have, is on either the Saudis or the Israelis; maybe even both.
But Pompous Mike and Bolt-on Bolt-off need to be removed from any semblance of governmental authority. I could go on but this whole affair is making me tired...I'm going back to my swamp.
Jun 18, 2019 | www.asiatimes.comThere have always been people who have tried to gain power and control. The only distinction was the mechanism through which they planned to achieve it: brute force or something more original. For example, researchers manipulate data to attain the results they want, while traders try to manipulate and influence market prices by disseminating erroneous information. Some go even further by conducting so-called "false flag" and "fake news" operations.
However, it is a gradual process. First, the technique of misinformation is implemented – as you may remember, in 2016, the Internet was filled with fake news aimed at distorting public opinion and helping one of the candidates to become president of the United States of America. This year, intelligence agencies and non-government entities have decided to use similar ploys to influence oil prices.
According to Wikipedia, a false flag is "intentional misrepresentation or covert operation designed to deceive; the deception creates the appearance of a particular party, group, or nation being responsible for some activity, disguising the actual source of responsibility." Recently it became popular for countries to "organize attacks on themselves and make the attacks appear to be by enemy nations or terrorists, thus giving the nation that was supposedly attacked a pretext for domestic repression and foreign military or economic aggression."
Recently there were news report that two oil tankers had been damaged in a suspected attack in the waters between the United Arab Emirates and Iran as they were leaving the Persian Gulf. And predictably, the United States claimed that Iran was responsible for damaging the vessels in the Gulf of Oman. This was the second such incident in four weeks.
The question that must be raised is who gains what from these incidents. Let's start from saying that even if Tehran had nothing to do with these attacks, it will still suffer the consequences. It is enough to recall the Gulf of Tonkin incident that took place in August 1964. Back then, a US-staged false flag initiated full-scale conflict in Southeast Asia.
Iran has already accused the US of lying about a "torpedo attack" on an American-linked oil tanker. "The US and its regional allies must stop warmongering and put an end to mischievous plots and false-flag operations in the region," Iran's mission to the United Nations said .
As history has shown, the Americans won't back down. Does it mean that Iran is next on its target list for war? Only time will tell.
Nevertheless, without waiting for the results of an investigation, Brent prices spiked after the reports of the attacks on tankers leaving the Persian Gulf.
The Brent crude quote won 4.45% on Thursday, shortly after news of the attacks broke, but it has since slightly decreased, or, should we say, corrected. Without any doubt, someone managed to put up a really good million-dollar front.
Jun 19, 2019 | www.oftwominds.com
The system is broken, and the managerial elite will keep it broken because it serves their interests to keep it broken.
America's managerial elite came to do good and stayed to do well--at the expense of everyone beneath them. Now that they've entrenched themselves at the top of the status quo, there's no way to dislodge them, even as their failure to address what's broken, much less actually fix what's broken, insures systemic breakdown.
In government, the managerial elite is known as The Deep State : those who remain in power regardless of who's in elected office. In local government, managerial elites often shift positions, moving from elected office to a plum position in the bureaucracy where they can draw a big paycheck out of sight until they retire.
In Corporate America, managerial elites also move around, leaving sinking ships (that they may well have helped sink) as needed, and moving to think tanks or academia if their failures start multiplying.
Changing elected officials does nothing to dislodge our managerial elite overlords. The new mayor, governor or president comes and goes, and all the major institutions--education, higher education, healthcare, national defense, critical infrastructure--continue down the same path of enriching entrenched insiders while the institution fails its core missions.
If you think this chart of soaring student loan debt is a sign of "success," you are 1) delusional 2) protected from the dire consequences of this failure 3) getting your paycheck from this failed system. That in a nutshell is the state of the nation: those who are protected from the consequences of failure are loyal to the Establishment, as are the millions drawing a paycheck from systems they know are irredeemable failures.
Let's review the central institutions of the nation:
- Healthcare: a failed system doomed to bankrupt the nation.
- Defense: a failed system of cartels and Pentagon fiefdoms that have saddled the nation with enormously costly failed weapons systems like the F-35 and the LCS.
- Higher Education: a bloated, failed system that is bankrupting an entire generation while mis-educating them for productive roles in the emerging economy. (I cover this in depth in The Nearly Free University and the Emerging Economy and Get a Job, Build a Real Career and Defy a Bewildering Economy .)
- Foreign policy: Iraq: a disaster. Afghanistan: a disaster. Libya: a disaster. Syria: a disaster. Need I go on?
- Political governance: a corrupt system of self-serving elites, lobbyists, pay-to-play, corporate puppet-masters, and sociopaths who see themselves as above the law.
In Why Our Status Quo Failed and Is Beyond Reform , I explain why the only possible output of these systems is failure .
The sole output of America's managerial elite is self-serving hubris.
In an open market, failed leadership has consequences. Customers vanish and the enterprise goes bankrupt, or shareholders and employees rally to fire the failed leadership.
In our state-cartel system, failed leadership only tightens its grip on the nation's throat. The Deep State can't be fired, nor does it ever stand for election. The two political parties are interchangeable, as are the politicos who race from fund-raiser to fund-raiser.
It's tempting to blame the individuals who inhale the wealth and power of our failed system, but it's the system, not the individuals , though a more corrupt, craven, self-serving lot cannot easily be assembled.
Centralized hierarchies concentrate power at the top of the pyramid. That power is a magnet for everyone who seeks to wield power and enrich themselves in the process.
In the financial system, this concentration of power is visible in the chart below: the super-rich have become immensely richer in the past few decades of central banks' vast expansion of credit and financialization.
As systems become more complex, the need for a professional class to manage the overwhelming complexity grows. This class excels at appearing to manage complexity while ignoring the larger dynamics driving the system over the cliff.
And so we have endless meetings of highly paid people over trivial issues while the entire system careens toward meltdown. "Stakeholders" multiply in endless profusion, dooming every project to a glacial process that increases the sums paid to manage the glacial process and pushes the final cost to the moon.
The self-serving managerial elite always has one answer for every problem: give us more money. If the budget expands by 10% and nothing actually changes for the better, then the "solution" is a 25% increase in funding.
Budgets expand by leaps and bounds, but none of the systemic problems are ever resolved.
It's not hard to figure out why: look at the system's incentives. If systems were radically simplified and made more efficient, the need for an ever-expanding class of permanent managers would diminish. And so the solution is always more fodder for the managerial elite: more complexity, more meetings, more accumulation of power, more managers and always, more money.
Thus it is no surprise that the calls for "free" college and "Medicare for All" are rising: the managerial elite that has bankrupted higher education and healthcare while enriching themselves desperately needs to be bailed out, lest the systems they've steered toward the fiscal cliff deservedly go broke.
In a similar set of incentives, few weapons systems ever come in under budget when the Pentagon can always come up with another $10 or $20 billion for cost over-runs.
The system is broken, and the managerial elite will keep it broken because it serves their interests to keep it broken. Unfortunately we'll all suffer when the managerial elite is no longer able to stave off the dire fiscal consequences of their self-serving leadership.
Nov 05, 2017 | www.zerohedge.com
Authored by Matt Taibbi via RollingStone.com,
How universities, banks and the government turned student debt into America's next financial black hole...
On a wind-swept, frigid night in February 2009, a 37-year-old schoolteacher named Scott Nailor parked his rusted '92 Toyota Tercel in the parking lot of a Fireside Inn in Auburn, Maine. He picked this spot to have a final reckoning with himself. He was going to end his life.
Beaten down after more than a decade of struggle with student debt, after years of taking false doors and slipping into various puddles of bureaucratic quicksand, he was giving up the fight. "This is it, I'm done," he remembers thinking. "I sat there and just sort of felt like I'm going to take my life. I'm going to find a way to park this car in the garage, with it running or whatever."
Nailor's problems began at 19 years old, when he borrowed for tuition so that he could pursue a bachelor's degree at the University of Southern Maine. He graduated summa cum laude four years later and immediately got a job in his field, as an English teacher.
Bu t he graduated with $35,000 in debt, a big hill to climb on a part-time teacher's $18,000 salary. He struggled with payments, and he and his wife then consolidated their student debt, which soon totaled more than $50,000. They declared bankruptcy and defaulted on the loans. From there he found himself in a loan "rehabilitation" program that added to his overall balance. "That's when the noose began to tighten," he says.
The collectors called day and night, at work and at home. "In the middle of class too, while I was teaching," he says. He ended up in another rehabilitation program that put him on a road toward an essentially endless cycle of rising payments. Today, he pays $471 a month toward "rehabilitation," and, like countless other borrowers, he pays nothing at all toward his real debt, which he now calculates would cost more than $100,000 to extinguish. "Not one dollar of it goes to principal," says Nailor. "I will never be able to pay it off. My only hope to escape from this crushing debt is to die."
After repeated phone calls with lending agencies about his ever-rising interest payments, Nailor now believes things will only get worse with time. "At this rate, I may easily break $1 million in debt before I retire from teaching," he says.
Nailor had more than once reached the stage in his thoughts where he was thinking about how to physically pull off his suicide. "I'd been there before, that just was the worst of it," he says. "It scared me, bad."
He had a young son and a younger daughter, but Nailor had been so broken by the experience of financial failure that he managed to convince himself they would be better off without him. What saved him is that he called his wife to say goodbye. "I don't know why I called my wife. I'm glad I did," he says. "I just wanted her or someone to tell me to pick it up, keep fighting, it's going to be all right. And she did."
From that moment, Nailor managed to focus on his family. Still, the core problem – the spiraling debt that has taken over his life, as it has for millions of other Americans – remains.
Horror stories about student debt are nothing new. But this school year marks a considerable worsening of a tale that ought to have been a national emergency years ago. The government in charge of regulating this mess is now filled with predatory monsters who have extensive ties to the exploitative for-profit education industry – from Donald Trump himself to Education Secretary Betsy DeVos, who sets much of the federal loan policy, to Julian Schmoke, onetime dean of the infamous DeVry University, whom Trump appointed to police fraud in education.
Americans don't understand the student-loan crisis because they've been trained to view the issue in terms of a series of separate, unrelated problems.
They will read in one place that as of the summer of 2017, a record 8.5 million Americans are in default on their student debt, with about $1.3 trillion in loans still outstanding.
In another place, voters will read that the cost of higher education is skyrocketing, soaring in a seemingly market-defying arc that for nearly a decade now has run almost double the rate of inflation. Tuition for a halfway decent school now frequently surpasses $50,000 a year. How, the average newsreader wonders, can any child not born in a yacht afford to go to school these days?
In a third place, that same reader will see some heartless monster, usually a Republican, threatening to cut federal student lending. The current bogeyman is Trump, who is threatening to slash the Pell Grant program by $3.9 billion, which would seem to put higher education even further out of reach for poor and middle-income families. This too seems appalling, and triggers a different kind of response, encouraging progressive voters to lobby for increased availability for educational lending.
But the separateness of these stories clouds the unifying issue underneath: The education industry as a whole is a con. In fact, since the mortgage business blew up in 2008, education and student debt is probably our reigning unexposed nation-wide scam.
It's a multiparty affair, what shakedown artists call a "big store scheme," like in the movie The Sting : a complex deception requiring a big cast to string the mark along every step of the way. In higher education, every party you meet, from the moment you first set foot on campus, is in on the game.
America as a country has evolved in recent decades into a confederacy of widescale industrial scams. The biggest slices of our economic pie – sectors like health care, military production, banking, even commercial and residential real estate – have become crude income-redistribution schemes, often untethered from the market by subsidies or bailouts, with the richest companies benefiting from gamed or denuded regulatory systems that make profits almost as assured as taxes. Guaranteed-profit scams – that's the last thing America makes with any level of consistent competence. In that light, Trump, among other things, the former head of a schlock diploma mill called Trump University, is a perfect president for these times. He's the scammer-in-chief in the Great American Ripoff Age, a time in which fleecing students is one of our signature achievements.
It starts with the sales pitch colleges make to kids. The thrust of it is usually that people who go to college make lots more money than the unfortunate dunces who don't. "A bachelor's degree is worth $2.8 million on average over a lifetime" is how Georgetown University put it. The Census Bureau tells us similarly that a master's degree is worth on average about $1.3 million more than a high school diploma.
But these stats say more about the increasing uselessness of a high school degree than they do about the value of a college diploma. Moreover, since virtually everyone at the very highest strata of society has a college degree, the stats are skewed by a handful of financial titans. A college degree has become a minimal status marker as much as anything else. "I'm sure people who take polo lessons or sailing lessons earn a lot more on average too," says Alan Collinge of Student Loan Justice, which advocates for debt forgiveness and other reforms. "Does that mean you should send your kids to sailing school?"
But the pitch works on everyone these days, especially since good jobs for Trump's beloved "poorly educated" are scarce to nonexistent. Going to college doesn't guarantee a good job, far from it, but the data show that not going dooms most young people to an increasingly shallow pool of the very crappiest, lowest-paying jobs. There's a lot of stick, but not much carrot, in the education game.
It's a vicious cycle. Since everyone feels obligated to go to college, most everyone who can go, does, creating a glut of graduates. And as that glut of degree recipients grows, the squeeze on the un-degreed grows tighter, increasing further that original negative incentive: Don't go to college, and you'll be standing on soup lines by age 25.
With that inducement in place, colleges can charge almost any amount, and kids will pay – so long as they can get the money. And here we run into problem number two: It's too easy to find that money.
Parents, not wanting their kids to fall behind, will pay every dollar they have. But if they don't have the cash, there is a virtually unlimited amount of credit available to young people. Proposed cuts to Pell Grants aside, the landscape is filled with public and private lending, and students gobble it up. Kids who walk into financial-aid offices are often not told what signing their names on the various aid forms will mean down the line. A lot of kids don't even understand the concept of interest or amortization tables – they think if they're borrowing $8,000, they're paying back $8,000.
Nailor certainly was unaware of what he was getting into when he was 19. "I had no idea [about interest]," he says. "I just remember thinking, 'I don't have to worry about it right now. I want to go to school.' " He pauses in disgust. "It's unsettling to remember how it was like, 'Here, just sign this and you're all set.' I wish I could take the time machine back and slap myself in the face."
The average amount of debt for a student leaving school is skyrocketing even faster than the rate of tuition increase.
In 2016, for instance, the average amount of debt for an exiting college graduate was a staggering $37,172. That's a rise of six percent over just the previous year. With the average undergraduate interest rate at about 3.7 percent, the interest alone costs around $115 per month, meaning anyone who can't afford to pay into the principal faces the prospect of $69,000 in payments over 50 years.
So here's the con so far.
You must go to college because you're screwed if you don't.
Costs are outrageously high, but you pay them because you have to, and because the system makes it easy to borrow massive amounts of money
The third part of the con is the worst: You can't get out of the debt.
Since government lenders in particular have virtually unlimited power to collect on student debt – preying on everything from salary to income-tax returns – even running is not an option. And since most young people find themselves unable to make their full payments early on, they often find themselves perpetually paying down interest only, never touching the principal. Our billionaire president can declare bankruptcy four times, but students are the one class of citizen that may not do it even once.
October 2017 was supposed to represent the first glimmer of light at the end of this tunnel. This month marks the 10th anniversary of the Public Service Loan Forgiveness program, one of the few avenues for wiping out student debt. The idea, launched by George W. Bush, was pretty simple: Students could pledge to work 10 years for the government or a nonprofit and have their debt forgiven. In order to qualify, borrowers had to make payments for 10 years using a complex formula. This month, then, was to start the first mass wipeouts of debt in the history of American student lending. But more than half of the 700,000 enrollees have already been expunged from the program for, among other things, failing to certify their incomes on time, one of many bureaucratic tricks employed to limit forgiveness eligibility. To date, fewer than 500 participants are scheduled to receive loan forgiveness in this first round.
Moreover, Trump has called for the program's elimination by 2018, meaning that any relief that begins this month is likely only temporary. The only thing that is guaranteed to remain real for the immediate future are the massive profits being generated on the backs of young people, who before long become old people who, all too often, remain ensnared until their last days in one of the country's most brilliant and devious moneymaking schemes.
Everybody wins in this madness, except students. Even though many of the loans are originated by the state, most of them are serviced by private or quasi-private companies like Navient – which until 2014 was the student-loan arm of Sallie Mae – or Nelnet, companies that reported a combined profit of around $1 billion last year (the U.S. government made a profit of $1.6 billion in 2016!). Debt-collector companies like Performant (which generated $141.4 million in revenues; the family of Betsy DeVos is a major investor), and most particularly the colleges and universities, get to prey on the desperation and terror of parents and young people, and in the process rake in vast sums virtually without fear of market consequence.
About that: Universities, especially public institutions, have successfully defended rising tuition in recent years by blaming the hikes on reduced support from states. But this explanation was blown to bits in large part due to a bizarre slip-up in the middle of a controversy over state support of the University of Wisconsin system a few years ago.
In that incident, UW raised tuition by 5.5 percent six years in a row after 2007. The school blamed stresses from the financial crisis and decreased state aid. But when pressed during a state committee hearing in 2013 about the university's finances, UW system president Kevin Reilly admitted they held $648 million in reserve, including $414 million in tuition payments. This was excess hidey-hole cash the school was sitting on, separate and distinct from, say, an endowment fund.
After the university was showered with criticism for hoarding cash at a time when it was gouging students with huge price increases every year, the school responded by saying, essentially, it only did what all the other kids were doing. UW released data showing that other major state-school systems across the country were similarly stashing huge amounts of cash. While Wisconsin's surplus was only 25 percent of its operating budget, for instance, Minnesota's was 29 percent, and Illinois maintained a whopping 34 percent reserve.
When Collinge, of Student Loan Justice, looked into it, he found that the phenomenon wasn't confined to state schools. Private schools, too, have been hoarding cash even as they plead poverty and jack up tuition fees. "They're all doing it," he says.
While universities sit on their stockpiles of cash and the loan industry generates record profits, the pain of living in debilitating debt for many lasts into retirement. Take Veronica Martish. She's a 68-year-old veteran, having served in the armed forces in the Vietnam era. She's also a grandmother who's never been in trouble and consid?ers herself a patriot. "The thing is, I tried to do everything right in my life," she says. "But this ruined my life."
This is an $8,000 student loan she took out in 1989, through Sallie Mae. She borrowed the money so she could take courses at Quinebaug Valley Community College in Connecticut. Five years later, after deaths in her family, she fell behind on her payments and entered a loan-rehabilitation program. "That's when my nightmare began," she says.
In rehabilitation, Martish's $8,000 loan, with fees and interest, ballooned into a $27,000 debt, which she has been carrying ever since. She says she's paid more than $63,000 to date and is nowhere near discharging the principal. "By the time I die," she says, "I will probably pay more than $200,000 toward an $8,000 loan." She pauses. "It's a scam, you see. Nothing ever comes off the loan. It's all interest and fees. And they chase you until you're old, like me. They never stop. Ever."
And that's the other thing about lending to students: It's the safest grift around.
There's probably no better symbol of the bankruptcy of the education industry than Trump University. The half-literate president's effort at higher learning drew in suckers with pathetic promises of great real-estate insights (for instance, that Trump "hand-picked" the instructors) and then charged them truckfuls of cash for get-rich-quick tutorials that students and faculty later described as "almost completely worthless" and a "total lie." That Trump got to settle a lawsuit on this matter for $25 million and still managed to be elected president is, ironically, a remarkable testament to the failure of our education system. About the only example that might be worse is DeVry University, which told students that 90 percent of graduates seeking jobs found them in their fields within six months of graduation. The FTC found those claims "false and unsubstantiated," and ordered $100 million in refunds and debt relief, but that was in 2016 – before Trump put DeVry chief Schmoke, of all people, in charge of rooting out education fraud. Like a lot of things connected to politics lately, it would be funny if it weren't somehow actually happening.?"Yeah, it's the fox guarding the henhouse," says Collinge. "You could probably find a worse analogy."
But the real problem with the student-loan story is that it's so poorly understood by people not living the nightmare. There's so much propaganda that blames the borrowers for taking on the debt in the first place that there's often little sympathy for people in hopeless situations. To make matters worse, band-aid programs that supposedly offer help hypnotize the public into thinking there are ways out, when the "help" is usually just another trick to add to the balance.
"That's part of the problem with the narrative," says Nailor, the schoolteacher. "People think that there's help, so what are you complaining about? All you got to do is apply for help."
But the help, he says, coming from a for-profit predatory system, often just makes things worse. "It did for me," he says. "It does for a lot of people."jcaz -> ThirdWorldNut , Nov 5, 2017 7:36 PMMoe Hamhead -> Escrava Isaura , Nov 5, 2017 8:05 PM
So..... This guy is working ONE job, part-time.... How does he fill the rest of his day?
Take away his student loan, he's still living on $18K/yr- you're still broke...NoPension -> Grimaldus , Nov 5, 2017 9:10 PM
The real flaw is associating "higher" education with value. Get a job. Earn an income. Find an interest for your free time. Raise a family. Spare the four years of wasted time and money.WhackoWarner -> CunnyFunt , Nov 5, 2017 7:10 PM
Colleges.....those bastions of conservatism.Sizzurp , Nov 5, 2017 7:08 PM
Yeah there is a predatory lending story here...Krungle -> Sizzurp , Nov 5, 2017 7:14 PM
If you want to take the risk of going into debt to attend college, you better come out with skills that are in high demand. Otherwise you are much better off going into the military, or going to trade school. BTW, thank the Clintons for making it impossible to get out of student debt through bankruptcy.Boxed Merlot -> Krungle , Nov 5, 2017 8:16 PM
If you want to give out loans to kids then you should accept the risk that they might default on that debt and leave you with the tab. Let's stop the coddling the banker bullshit. They lobbied to make this loans extremely difficult to discharge in bankruptcy. They wanted all the profit and none of the risk. Let them assume risk and they'll stop handing out loans to unqualified borrowers.t0mmyBerg -> Krungle , Nov 5, 2017 8:50 PM
Amen! If the money for an "education" is more difficult to obtain, that ought to be a clue as to the value of the information / training one is purchasing. The fact it's so easy to get is all one needs to know about the worth of what's being spewed by those dispensing their so-called knowledge / truth.
Allow the lawful discharge through bankruptcy and punish every single financial institution, (and especially their individual persons who oversaw the process), that has profited off of ballooning "principle" amounts that even come close to doubling an original amount with ties to any government official that voted to place these kind of loans in such a category.
This is madness! "Woe to those who make unjust laws, to those who issue oppressive decrees,..." Isaiah 10:1
jmoCunnyFunt -> Sizzurp , Nov 5, 2017 7:25 PM
Finally at least one person gets it. The inability to discharge student loan debt through the taint of bankruptcy is one of the greatest financial crimes of the last century. Entirely unAmerican. America used to be all about fresh starts. That is one reason our business life is more vibrant than say many places in Europe with less benign laws. Same goes for individuals. If you go through the pain of bankruptcy there is no reason you shouldnt get that debt discharged. Whomever voted for that law, whether Clintons or others should be beaten to death.ElwinCthulhu -> Sizzurp , Nov 5, 2017 7:35 PM
Hobart's 38-week combo welder program costs $16,625. A trained kid willing to travel and work in the field would make more than an engineering graduate who paid a quarter-million for his degree.PrefabSprout -> Sizzurp , Nov 5, 2017 7:54 PM
No mention made of the rats nest Social Justice program$ infesting college and university campuses across the country, at untold cost, worthless sullshit.Krungle , Nov 5, 2017 7:11 PM
But if you go into the military, you get poisoned and dehabilitated by bazillion vaccines, which you can't refuse.JohnG -> Krungle , Nov 5, 2017 8:06 PM
Not that the student loan thing isn't another banker scam, but the lead story doesn't make sense.
Firstly, educators get loan forgiveness after a decade or two of public service. And there are income contingent repayment plans. And lawyers have, in fact, been able to get these things discharged. None of this changes the scam that is giving out high interest loans to kids to pursue an education. But you might want to start with a sob story that makes more sense. How about a pediatrician with 400k in loans and making 100k a year living in a coastal city? Or how about the art history majors at private liberal arts schools with 200k in debt making $10/hour as a barista? But teachers are one of the few groups that has an actual federal out.bluskyes , Nov 5, 2017 7:15 PM
Maybe. My wife is a teacher in a Title I, low income school, and had been for 13 years..... She also has about 13K remaining in student loans, originally federal direct and Perkins loans. With her over 10 years in title I schools, she should be able to get them forgiven, except that she consolidated these loans before I met her, and now they are "serviced" by AES, a private lender, and they are no longer eligible for discharge. This I call the "Consolidation Scam."uhland62 -> bluskyes , Nov 5, 2017 7:27 PM
Should have taken a math course first.dwboston , Nov 5, 2017 7:19 PM
Pay off debt before you have children. There is no law that you must have children, if the debt makes it impossible. I would have liked a lot of tings but could not afford them.TheLastTrump -> dwboston , Nov 5, 2017 7:31 PM
Taibbi has some gall to blame Trump, DeVos and others for the student debt explosion, but not one word about Obama or the government's takeover of the student loan market as part of Obamacare? The student loan market was folded into the ACA as part of the fake accounting to make the ACA numbers "work". Every market the govenrment insinuates itself into - housing, health care, college tuition, etc. - gets distorted and costs explode. Taibbi's yet another dishonest liberal.dwboston -> TheLastTrump , Nov 5, 2017 9:11 PM
Yikes- is this factual? If so fuck him. All name, no cattle.
Obama began his turn as destroyer in chief at the height of the Great Recession, everyone & their brother was running into the safety of college & student loans to pay the bills. I recall watching the local parking lots swell. :) So there's that.
But numbers are off the charts every year because younger millennials expect the govt to forgive all those loans at some point. That's how many thought 20 years ago & it's worse today.allgoodmen , Nov 5, 2017 7:22 PM
"The nexus between the student loan program and ObamaCare is purely opportunistic. As the Affordable Care Act was passing through Congress, its wheels greased by the wholly fraudulent assertion that it didn't need 60 votes to pass the Senate, the administration decided to put in a provision eliminating the private student loan industry, fully federalizing the program. What was not widely understood at the time was that it hoped to raid the funds paid by students to provide money for the bottomless pit known as ObamaCare"
http://thehill.com/opinion/columnists/dick-morris/302247-loans-subsidize...TheLastTrump , Nov 5, 2017 7:26 PM
Good article from Matt Taibbi, but you can count on this bolshevik to leave out Clinton complicity in the for-profit student loan scandals:
http://www.slate.com/blogs/moneybox/2016/09/06/bill_clinton_earned_milli...kenny500c , Nov 5, 2017 7:30 PM
American college farm. Biggest swindle there is. Your education is an afterthought.
No reason student debt should be treated differently from other debts, allow it to be written off in BK court.
economistsview.typepad.comThomas Piketty on a theme I've been hammering lately, student debt is too damn high!:Student Loan Debt Is the Enemy of Meritocracy in the US: ...the amount of household debt and even more recently of student debt in the U.S. is something that is really troublesome and it reflects the very large rise in tuition in the U.S. a very large inequality in access to education. I think if we really want to promote more equal opportunity and redistribute chances in access to education we should do something about student debt. And it's not possible to have such a large group of the population entering the labor force with such a big debt behind them. This exemplifies a particular problem with inequality in the United States, which is very high inequality and access to higher education. So in other countries in the developed world you don't have such massive student debt because you have more public support to higher education. I think the plan that was proposed earlier this year in 2015 by President Obama to increase public funding to public universities and community college is exactly justified.This is really the key for higher growth in the future and also for a more equitable growth..., you have the official discourse about meritocracy, equal opportunity and mobility, and then you have the reality. And the gap between the two can be quite troublesome. So this is like you have a problem like this and there's a lot of hypocrisy about meritocracy in every country, not only in the U.S., but there is evidence suggesting that this has become particularly extreme in the United States. ... So this is a situation that is very troublesome and should rank very highly in the policy agenda in the future in the U.S.
DrDick -> Jeff R Carter:
"college is heavily subsidized"
In 1980, the states subsidized 70% of the cost per student. Today it is less than 30% and the amount of grants and scholarships has likewise declined. Tax cuts for rich people and conservative hatred for education are the biggest problem.
cm -> to DrDick...
I don't know what Jeff meant, but "easy" student loans are a subsidy to colleges, don't you think? Subsidies don't have to be paid directly to the recipient. The people who are getting the student loans don't get to keep the money (but they do get to keep the debt).
DrDick -> to cm...
No I do not agree. If anything, they are a subsidy to the finance industry (since you cannot default on them). More basically, they do not make college more affordable or accessible (his point).
cm -> to DrDick...
Well, what is a subsidy? Most economic entities don't get to keep the money they receive, but it ends up with somebody else or circulates. If I run a business and somebody sends people with money my way (or pays me by customer served), that looks like a subsidy to me - even though I don't get to keep the money, much of it paid for operational expenses not to forget salaries and other perks.
Just because it is not prearranged and no-strings (?) funding doesn't mean it cannot be a subsidy.
The financial system is involved, and benefits, whenever money is sloshing around.
Pinkybum -> to cm...
I think DrDick has this the right way around. Surely one should think of subsidies as to who the payment is directly helping. Subsidies to students would lower the barrier of entry into college. Subsidies to colleges help colleges hire better professors, offer more classes, reduce the cost of classes etc. Student loans are no subsidy at all except to the finance industry because they cannot be defaulted on and even then some may never be paid back because of bankruptcies.
However, that is always the risk of doing business as a loan provider. It might be interesting to assess the return on student loans compared to other loan instruments.
mrrunangun -> to Jeff R Carter...
The cost of higher education has risen relative to the earning power of the student and/or the student's family unless that family is in the top 10-20% wealth or income groups.
50 years ago it was possible for a lower middle class student to pay all expenses for Northwestern University with his/her own earnings. Tuition was $1500 and room + board c $1000/year. The State of Illinois had a scholarship grant program and all you needed was a 28 or 29 on the ACT to qualify for a grant that paid 80% of that tuition. A male student could make $2000 in a summer construction job, such as were plentiful during those booming 60s. That plus a low wage job waiting tables, night security, work-study etc could cover the remaining tuition and expense burden.
The annual nut now is in excess of $40,000 at NU and not much outside the $40,000-50,000 range at other second tier or elite schools.
The state schools used to produce the bedrock educated upper middle class of business and professional people in most states west of the seaboard. Tuition there 50 years ago was about $1200/year and room and board about $600-800 here in the midwest. Again you could put yourself through college waiting tables part-time. It wasn't easy but it was possible.
No way a kid who doesn't already possess an education can make the tuition and expenses of a private school today. I don't know what the median annual family income was in 1965 but I feel confident that it was well above the annual nut for a private college. Now it's about equal to it.
mrrunangun -> to mrrunangun...
1965 median family income was $6900, more than 200% of the cost of a year at NU. Current median family income is about 75% of a year at NU.
anne -> to 400 ppm CO2...
Click on "Share" under the graph that is initially constructed and copy the "Link" that appears:
March 22, 2015
Federal debt, 1966-2014
This allows a reader to understand how the graph was constructed and to work with the graph.
The US spends half the money the entire world spends on war, that is success!
Massive student debt, huge doses poverty, scores of thousands [of annual neglect related] deaths from the wretched health care system etc are not failure!
Poor education is the enemy of meritocracy. Costly, bloated administrations full of non-educators there to pamper and pander to every possible complaint and special interest - that is the enemy of meritocracy.
Convincing kids to simple "follow their dreams" regardless of education cost and career potential is the enemy of meritocracy. Allowing young adults to avoid challenging and uncomfortable and difficult subjects under the guise of compassion is the enemy of meritocracy. Financial illiteracy is the enemy of meritocracy.
Manageable student debt is no great enemy of meritocracy.
cm -> to tew...
This misses the point, aside frm the victim blaming. Few people embark on college degrees to "follow their dream", unless the dream is getting admission to the middle class job market.
When I was in elementary/middle school, the admonitions were of the sort "if you are not good in school you will end up sweeping streets" - from a generation who still saw street cleaning as manual labor, in my days it was already mechanized.
I estimate that about 15% or so of every cohort went to high school and then college, most went to a combined vocational/high school track, and some of those then later also went college, often from work.
This was before the big automation and globalization waves, when there were still enough jobs for everybody, and there was no pretense that you needed a fancy title to do standard issue work or as a social signal of some sort.
Richard H. Serlin:
Student loans and college get the bulk of the education inequality attention, and it's not nearly enough attention, but it's so much more. The early years are so crucial, as Nobel economist James Heckman has shown so well. Some children get no schooling or educational/developmental day care until almost age 6, when it should start in the first year, with preschool starting at 3. Others get high quality Montessori, and have had 3 years of it by the time they enter kindergarten, when others have had zero of any kind of education when they enter kindergarten.
Some children spend summers in high quality summer school and educational programs; others spend three months digressing and learning nothing. Some children get SAT prep programs costing thousands, and high end educational afterschool programs; others get nothing after school.
All these things should be available in high quality to any child; it's not 1810 anymore Republicans, the good old days of life expectancy in the 30s and dirt poverty for the vast majority. We need just a little more education in the modern world. But this also makes for hugely unequal opportunity.
Observer -> to Observer...
Data on degree by year ...
Observer -> to Syaloch...
One needs to differentiate between costs (total dollars spent per student credit hour or degree, or whatever the appropriate metric is) and price (what fraction of the cost is allocated to the the end-user student).
Note that the level of state funding impacts price, not cost; that discussion is usually about cost shifting, not cost reduction.
I'd say that the rate of increase in costs is, more or less, independent of the percent of costs borne by the state. You can indeed see this in the increase in private schools, the state funding is small/nil (particularly in schools without material endowments, where actual annual fees (prices) must closely actual match annual costs). Price discounts and federal funding may both complicate this analysis.
I think much more effort should be spent on understanding and controlling costs. As with health care, just saying "spend more money" is probably not the wise or even sustainable path in the long term.
Costs were discussed at some length here a year(?) or so ago. There is at least one fairly comprehensive published analysis of higher education costs drivers. IIRC, their conclusion was that there were a number of drivers - its not just food courts or more administrators. Sorry, don't recall the link.
Syaloch -> to cm...
Actually for my first job out of college at BLS, I basically was hired for my "rounded personality" combined with a general understanding of economic principles, not for any specific job-related skills. I had no prior experience working with Laspeyres price indexes, those skills were acquired through on-the-job training. Similarly in software development there is no degree that can make you a qualified professional developer; the best a degree can do is to show you are somewhat literate in X development language and that you have a good understanding of general software development principles. Most of the specific skills you'll need to be effective will be learned on the job.
The problem is that employers increasingly want to avoid any responsibility for training and mentoring, and to shift this burden onto schools. These institutions respond by jettisoning courses in areas deemed unnecessary for short-term vocational purposes, even though what you learn in many of these courses is probably more valuable and durable in the long run than the skills obtained through job-specific training, which often have a remarkably short shelf-life. (How valuable to you now is all that COBOL training you had back in the day?)
I guess the question then is, is the sole purpose of higher education to provide people with entry-level job skills for some narrowly-defined job description which may not even exist in a decade? A lot of people these days seem to feel that way. But I believe that in the long run it's a recipe for disaster at both the individual and the societal level.
Richard H. Serlin -> to Observer...
The research is just not on you side, as Heckman has shown very well. Early education and development makes a huge difference, and at age 5-7 (kindergarten) children are much better off with more schooling than morning to noon. This is why educated parents who can afford it pay a lot of money for a full day -- with afterschool and weekened programs on top.
Yes, we're more educated than 1810, but I use 1810 because that's the kind of small government, little spending on education (you want your children educated you pay for it.) that the Republican Party would love to return us to if they thought they could get away with it. And we've become little more educated in the last 50 years even though the world has become much more technologically advanced.
January 30, 2015
Student Loans Outstanding as a share of Gross Domestic Product, 2007-2014
January 30, 2015
Student Loans Outstanding, 2007-2014
As to increasing college costs, would there be an analogy to healthcare costs?
July 25, 2009
Why Markets Can't Cure Healthcare
By Paul Krugman
Judging both from comments on this blog and from some of my mail, a significant number of Americans believe that the answer to our health care problems - indeed, the only answer - is to rely on the free market. Quite a few seem to believe that this view reflects the lessons of economic theory.
Not so. One of the most influential economic papers of the postwar era was Kenneth Arrow's "Uncertainty and the Welfare Economics of Health Care," * which demonstrated - decisively, I and many others believe - that health care can't be marketed like bread or TVs. Let me offer my own version of Arrow's argument.
There are two strongly distinctive aspects of health care. One is that you don't know when or whether you'll need care - but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor's office; and very, very few people can afford to pay major medical costs out of pocket.
This tells you right away that health care can't be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can't just trust insurance companies either - they're not in business for their health, or yours.
This problem is made worse by the fact that actually paying for your health care is a loss from an insurers' point of view - they actually refer to it as "medical costs." This means both that insurers try to deny as many claims as possible, and that they try to avoid covering people who are actually likely to need care. Both of these strategies use a lot of resources, which is why private insurance has much higher administrative costs than single-payer systems. And since there's a widespread sense that our fellow citizens should get the care we need - not everyone agrees, but most do - this means that private insurance basically spends a lot of money on socially destructive activities.
The second thing about health care is that it's complicated, and you can't rely on experience or comparison shopping. ("I hear they've got a real deal on stents over at St. Mary's!") That's why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.
You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don't trust them - they're profit-making institutions, and your treatment is their cost.
Between those two factors, health care just doesn't work as a standard market story.
All of this doesn't necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number of successful healthcare systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn't work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.
anne -> to anne...
January 30, 2015
College tuition and fees, 1980–2015
1980 ( 9.4)
1981 ( 12.4) Reagan
1982 ( 13.4)
1983 ( 10.4)
1984 ( 10.2)
1985 ( 9.1)
1986 ( 8.1)
1987 ( 7.6)
1988 ( 7.6) Bush
1989 ( 7.9)
1990 ( 8.1)
1991 ( 10.2)
1992 ( 10.7) Clinton
1993 ( 9.4)
1994 ( 7.0)
1995 ( 6.0)
1996 ( 5.7)
1997 ( 5.1)
1998 ( 4.2)
1999 ( 4.0)
2000 ( 4.1)
2001 ( 5.1) Bush
2002 ( 6.8)
2003 ( 8.4)
2004 ( 9.5)
2005 ( 7.5)
2006 ( 6.7)
2007 ( 6.2)
2008 ( 6.2)
2009 ( 6.0) Obama
2010 ( 5.2)
2011 ( 5.0)
2012 ( 4.8)
2013 ( 4.2)
2014 ( 3.7)
2015 ( 3.6)
Syaloch -> to anne...
I believe so, as I noted above. The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget.
Another interesting feature of both health care and college education is that there are many proffered explanations as to why their cost is rising so much relative to other areas, but a surprising lack of a really authoritative explanation based on solid evidence.
anne -> to Syaloch...
Another interesting feature of both health care and college education is that there are many proffered explanations as to why their cost is rising so much relative to other areas, but a surprising lack of a really authoritative explanation based on solid evidence.
[ Look to the paper by Kenneth Arrow, which I cannot copy, for what is to me a convincing explanation as to the market defeating factors of healthcare. However, I have no proper explanation about education costs and am only speculating or looking for an analogy. ]
anne -> to Syaloch...
The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget.
[ Nicely expressed. ]
Peter K. -> to anne...
"As to increasing college costs, would there be an analogy to healthcare costs?"
Yes, exactly. They aren't normal markets. There should be heavy government regulation.
JUST HAD AN IDEA THAT MIGHT LIMIT THE DAMAGE OF THESE PHONEY ONLINE COLLEGES (pardon shouting, but I think it's justified):
Only allow government guaranteed loans (and the accompanying you-can-never-get-out-of-paying) IF a built for that purpose government agency APPROVES said loan. What do you think?
Denis Drew -> to cm...
A big reason we had the real estate bubble was actually the mad Republican relaxation of loan requirements -- relying on the "free market." So, thanks for coming up with a good comparison.
By definition, for the most part, people taking out student loans are shall we say new to the world and more vulnerable to the pirates.
* * * * * * * * * *
[cut and paste from my comment on AB]
Jeff Bezos bought the Washington Post.
According to an article in the Huffington Post At Kaplan University, 'Guerrilla Registration' Leaves Students Deep In Debt, Kaplan Ed is among the worst of the worst of internet federal loan and grant sucking diploma mills. Going so far as to falsely pad bills $5000 or so dollars at diploma time - pay up immediately or you will never get your sheepskin; you wasted your time. No gov agency will act.
According to a lovely graph which I wish I could patch in here the Post may actually be currently be kept afloat only by purloined cash from Kaplan:
earnings before corporate overhead
2002 - Kaplan ed, $10 mil; Kaplan test prep, $45 mil: WaPo, $100 mil
2005 - Kaplan ed, $55 mil; Kaplan test prep, $100 mil; WaPo, $105 mil
2009 - Kaplan ed, $255 mil; Kaplan test prep, $5 mil; WaPo negative $175 mil
Wonder if billionaire Bezos will reach out to make Kaplan Ed victims whole. Will he really continue to use Kaplan's pirated money to keep WaPo whole -- if that is what is going on?
Johannes Y O Highness:
"theme I've been hammering lately, student debt is too damn high!: "
Too damn high
Because! Because every event in today's economy is the wish of the wealthy. Do you see why they suddenly wish to deeply educate the proles?
Opportunity cost! The burden of the intelligentsia, the brain work can by carried by robots or humans. Choice of the wealthy? Humans, hands down. Can you see the historical background?
Railroad was the first robot. According to Devon's Paradox, it was overused because of its increment of efficiency. Later, excessive roadbeds were disassembled. Rails were sold as scrap.
The new robots are not heavy lifters. New robots are there to do the work of the brain trust. As first robots replaced lower caste jokers, so shall new robots replace upper caste jokers. Do you see the fear developing inside the huddle of high rollers? Rollers now calling the play?
High rollers plan to educate small time hoods to do the work of the new robots, then kill the new robots before the newbie 'bot discovers how to kill the wealthy, to kill, to replace them forever.
Good bit of data on education costs here
This chart shows state spending per student and tuition ...
" overall perhaps the best description of the data is something along the lines of "sometimes state appropriations go up and sometimes they go down, but tuition always goes up." "
Sep 06, 2017 | www.theguardian.com The Guardian
Navient, spun off from Sallie Mae, has thrived as student loan debt spirals across the US. Its story reveals how, instead of fighting inequality, the education industry is reinforcing it
Nathan Hornes: 'Navient hasn't done a thing to help me. They just want their money. And they want it now.' Photograph: Fusion
A mong the 44 million Americans who have amassed our nation's whopping $1.4tn in student loan debt, a call from Navient can produce shivers of dread.
Navient is the primary point of contact, or the "servicer", for more student loans in the United States than any other company, handling 12 million borrowers and $300bn in debt. The company flourished as student loan debt exploded under the Obama administration, and its stock rose sharply after the election of Donald Trump.
But Navient also has more complaints per borrower than any other servicer, according to a Fusion analysis of data. And these mounting complaints repeatedly allege that the company has failed to live up to the terms of its federal contracts, and that it illegally harasses consumers . Navient says most of the ire stems from structural issues surrounding college finance – like the terms of the loans, which the federal government and private banks are responsible for – not about Navient customer service.
Navient has positioned itself to dominate the lucrative student loan industry in the midst of this crisis, flexing its muscles in Washington and increasingly across the states. The story of Navient's emerging power is also the story of how an industry built around the idea that education can break down inequities is reinforcing them.The tension at the center of the current controversy around student loans is simple: should borrowers be treated like any other consumers, or do they merit special service because education is considered a public good?
Often, the most vulnerable borrowers are not those with the largest debt, but low-income students, first-generation students, and students of color – especially those who may attend less prestigious schools and are less likely to quickly earn enough to repay their loans, if they graduate at all.
Last year, Navient received 23 complaints per 100,000 borrowers, more than twice that of the nearest competitor, according to Fusion's analysis. And from January 2014 to December 2016, Navient was named as a defendant in 530 federal lawsuits. The vast majority were aimed at the company's student loans servicing operations. (Nelnet and Great Lakes, the two other biggest companies in the student loans market, were sued 32 and 14 times over the same period, respectively.)
Many of the complaints and lawsuits aimed at the company relate to its standard practice of auto-dialing borrowers to solicit payments.
Shelby Hubbard says she has long been on the receiving end of these calls as she has struggled to pay down her debt. Hubbard racked up over $60,000 in public and private student loans by the time she graduated from Eastern Kentucky University with a basic healthcare-related degree.
"It consumes my every day," Hubbard said of the constant calls. "Every day, every hour, starting at 8 o'clock in the morning." Unlike mortgages, and most other debt, student loans can't be wiped away with bankruptcy.
These days, Hubbard, 26, works in Ohio as a logistics coordinator for traveling nurses. She's made some loan payments, but her take-home pay is about $850 every two weeks. With her monthly student loan bill at about $700, roughly half her income would go to paying the loans back, forcing her to lean more heavily on her fiancé. "He pays for all of our utilities, all of our bills. Because at the end of the day, I don't have anything else to give him," she said. The shadow of her debt hangs over every discussion about their wedding, mortgage payments, and becoming parents.
The power and reach of the student loan industry stacks the odds against borrowers. Navient doesn't just service federal loans, it has a hand in nearly every aspect of the student loan system. It has bought up private student loans, both servicing them and earning interest off of them. And it has purchased billions of dollars worth of the older taxpayer-backed loans, again earning interest, as well as servicing that debt. The company also owns controversial subsidiary companies such as Pioneer Credit Recovery that stand to profit from collecting the debt of loans that go into default.
label="How the Trump administration is undermining students of color | Mark Huelsman and Vijay Das" href="https://www.theguardian.com/commentisfree/2017/jul/15/trump-administration-students-color-debt">
And just as banks have done with mortgages, Navient packages many of the private and pre-2010 federal loans and sells them on Wall Street as asset-backed securities. Meanwhile, it's in the running to oversee the Department of Education's entire student debt web portal, which would open even more avenues for the company to profit from – and expand its influence over – Americans' access to higher education.
The federal government is the biggest lender of American student loans, meaning that taxpayers are currently on the hook for more than $1tn . For years, much of this money was managed by private banks and loan companies like Sallie Mae. Then in 2010, Congress cut out the middlemen and their lending fees, and Sallie Mae spun off its servicing arm into the publicly traded company Navient.
Led by former Sallie Mae executives, Navient describes itself as "a leading provider of asset management and business processing solutions for education, healthcare, and government clients." But it is best known for being among a handful of companies that have won coveted federal contracts to make sure students repay their loans. And critics say that in pursuit of getting that money back, the Department of Education has allowed these companies to all but run free at the expense of borrowers.
"The problem is that these servicers are too big to fail," said Persis Yu, director of the National Consumer Law Center's Student Loan Borrower Assistance Project. "We have no place to put the millions of borrowers whom they are servicing, even if they are not doing the servicing job that we want them to do."
In its last years, the Obama administration tried to rein in the student loan industry and promoted more options for reduced repayment plans for federal loans. Since then, Donald Trump's education secretary, Betsy DeVos , has reversed or put on hold changes the former education secretary John B King's office proposed and appears bent on further loosening the reins on the student loan industry , leaving individual students little recourse amid bad service.
In late August, DeVos's office announced that it would stop sharing information about student loan servicer oversight with the federal consumer watchdog agency known as the Consumer Financial Protection Bureau, or CFPB.
Earlier this year, as complaints grew, the CFPB sued Navient for allegedly misleading borrowers about the repayment options it is legally obligated to provide.
A central allegation is that Navient, rather than offering income-based repayment plans, pushed some people into a temporary payment freeze called forbearance. Getting placed into forbearance is a good Band-Aid but can be a terrible longer-term plan. When an account gets placed in forbearance, its interest keeps accumulating, and that interest can be added to the principal, meaning the loans only grow.
Lynn Sabulski, who worked in Navient's Wilkes-Barre, Pennsylvania, call center for five months starting in 2012, said she experienced first-hand the pressure to drive borrowers into forbearance.
"Performing well meant keeping calls to seven minutes or under," said Sabulski. "If you only have seven minutes, the easiest option to put a borrower in, first and foremost, is a forbearance." Sabulski said if she didn't keep the call times short, she could be written up or lose her job.
Navient denies the allegations, and a spokeswoman told Fusion via email seven and a half minutes was the average call time, not a target. The company maintains "caller satisfaction and customer experience" are a significant part of call center representatives' ratings.
But in a 24 March motion it filed in federal court for the CFPB's lawsuit, the company also said: "There is no expectation that the servicer will act in the interest of the consumer." Rather, it argued, Navient's job was to look out for the interest of the federal government and taxpayers.
Navient does get more per account when the servicer is up to date on payments, but getting borrowers into a repayment plan also has a cost because of the time required to go over the complex options.
The same day the CFPB filed its lawsuit, Illinois and Washington filed suits in state courts. The offices of attorneys general in nine other states confirmed to Fusion that they are investigating the company.
At a recent hearing in the Washington state case, the company defended its service: "The State's claim is not, you didn't help at all, which is what you said you would do. It's that, you could've helped them more." Navient insists it has forcefully advocated in Washington to streamline the federal loan system and make the repayment process easier to navigate for borrowers.
And it's true, Navient, and the broader industry, have stepped up efforts in recent years to influence decision makers. Since 2014, Navient executives have given nearly $75,000 to the company's political action committee, which has pumped money mostly into Republican campaigns, but also some Democratic ones. Over the same timespan, the company has spent more than $10.1m lobbying Congress, with $4.2m of that spending coming since 2016. About $400,000 of it targeted the CFPB, which many Republican lawmakers want to do away with.
Among the 22 former federal officials who lobby for Navient is the former US representative Denny Rehberg, a Republican, who once criticized federal aid for students as the welfare of the 21st century. His fellow lobbyist and former GOP representative Vin Weber sits on a board that has aired attack ads against the CFPB, as well as on the board of the for-profit college ITT Tech , which shuttered its campuses in 2016 after Barack Obama's Department of Education accused it of predatory recruitment and lending.
In response to what they see as a lack of federal oversight, California, Connecticut, Massachusetts, and the District of Columbia recently required student loan servicers to get licenses in their states. Not surprisingly, Fusion found a sharp increase in Navient's spending in states considering such regulations, with the majority of the $300,000 in Navient state lobbying allocated since 2016.
In Maine and Illinois, the legislatures were flooded with Navient and other industry lobbyists earlier this year, after lawmakers proposed their own versions of the license bills. The Maine proposal failed after Navient argued the issue should be left to the federal government. The Illinois bill passed the legislature, but the Republican governor, Bruce Rauner, vetoed it in August following lobbying from an industry trade group . Rauner said the bill encroached on the federal government's authority.
Researchers argue more data would help them understand how to improve the student loan process and prevent more people from being overwhelmed by debt. In 2008, Congress made it illegal for the Department of Education to make the data public, arguing that it was a risk for student privacy. Private colleges and universities lobbied to restrict the data. So, too, did Navient's predecessor, Sallie Mae, and other student loan servicing companies.
Today, companies like Navient have compiled mountains of data about graduations, debt and financial outcomes – which they consider proprietary information. The lack of school-specific data about student outcomes can be life-altering, leading students to pick schools they never would have picked. Nathan Hornes, a 27-year-old Missouri native, racked up $70,000 in student loans going to Everest College, an unaccredited school, before he graduated.
"Navient hasn't done a thing to help me," Hornes told Fusion. "They just want their money. And they want it now."
label="The US cities luring millennials with promises to pay off their student debts" href="https://www.theguardian.com/world/2016/mar/10/the-us-cities-luring-millennials-with-promises-to-pay-off-their-student-debts">
Hornes' loans were recently forgiven following state investigations into Everest's parent company Corinthian. But many other borrowers still await relief.
Better educating teens about financial literacy before they apply to college will help reduce their dependence on student loans, but that doesn't change how the deck is stacked for those who need them. A few states have made community colleges free , reducing the need for student loan servicers.
But until the Department of Education holds industry leaders like Navient more accountable, individual states can fix only so much, insists Senator Elizabeth Warren, one of the industry's most outspoken critics on Capitol Hill.
"Navient's view is, hey, I'm just going to take this money from the Department of Education and maximize Navient's profits, rather than serving the students," Warren said. "I hold Navient responsible for that. But I also hold the Department of Education responsible for that. They act as our agent, the agent of the US taxpayers, the agent of the people of the United States. And they should demand that Navient does better."
Laura Juncadella, a production assistant for The Naked Truth also contributed to this article
The Naked Truth: Debt Trap airs on Fusion TV 10 September at 9pm ET. Find out where to watch here
Oct 18, 2018 | www.nakedcapitalism.com
A fresh story at Bloomberg, which includes new analysis, shows the ugly student debt picture is getting uglier. The driver is that higher education costs keep rising, often in excess of the likely wages for graduates. The article's grim conclusion: "The next generation of graduates will include more borrowers who may never be able to repay."
Student debt is now the second biggest type of consumer debt in the US. At $1.5 trillion, is is second only to the mortgage market, and is also bigger than the subprime market before the crisis, which was generally pegged at $1.3 trillion. 1 Bloomberg also points out that unlike other categories of personal debt, student debt balances has shown consistent, or one might say persistent, growth since the crisis.
From the article:
Student loans are being issued at unprecedented rates as more American students pursue higher education . But the cost of tuition at both private and public institutions is touching all-time highs , while interest rates on student loans are also rising. Students are spending more time working instead of studying . (Some 85 percent of current students now work paid jobs while enrolled.) Experts and analysts worry that the next generation of graduates could default on their loans at even higher rates than in the immediate wake of the financial crisis.
The last sentence is alarming. As graduates of the class of 2009 like UserFriendly can attest, the job market was desperate. And for the next few years, the unemployment rate of new college graduates was higher than that of recent high school graduates. One of the corollaries of that is that more college graduates than before were taking work that didn't require a college degree; this is still a significant trend today. And on top of that, studies have found that early career earnings have a significant impact on lifetime earnings. While there are always exceptions, generally speaking, pay levels key off one's earlier compensation, so starting out at a lower income level is likely to crimp future compensation.
And on top of that, interest costs are rising. The rate for direct undergraduate loans is 5% and for graduate and professional schools, 6.6%. So student debt costs will also go up even before factoring in inflating school costs. So the ugly picture of delinquencies and defaults is destined to get worse.
Students attending for-profit universities and community colleges represented almost half of all borrowers leaving school and beginning to repay loans in 2011. They also accounted for 70 percent of all defaults. As a result, delinquencies skyrocketed in the 2011-12 academic year, reaching 11.73 percent.
Today, the student loan delinquency rate remains almost as high, which Scott-Clayton attributes to social and institutional factors, rather than average debt levels. "Delinquency is at crisis levels for borrowers, particularly for borrowers of color, borrowers who have gone to a for-profit and borrowers who didn't ultimately obtain a degree," she said, highlighting that each cohort is more likely to miss repayments on their loans than other public and private college students.
Those most at risk of delinquency tend to be, counterintuitively, those who've incurred smaller amounts of debt, explained Kali McFadden, senior research analyst at LendingTree. Graduates who leave school with six-figure degrees that are valued in the marketplace -- such as post-graduate law or medical degrees -- usually see a good return on their investment.
I'm a little leery of cheerful generalizations like "big ticket borrowers for professional degrees do better." "Better" may still not be that good. Recall that law school and in the last year, business school enrollments have fallen because candidates question whether the hard costs and loss of income while in school will pay off. And there are some degrees, like veterinary medicine, that are so pricey it's hard to see how they could possibly make economic sense.
What is distressing about this ugly picture is the lack of effective activism by the victims. I am sure some are trying, but in addition to the burden of being so overwhelmed by the debt burden as to lack the time and energy to do anything beyond cope, is the fact that being in debt is stigmatized in our society, and borrowers may not want to deal with condescension and criticism. Another obstacle to organizing is that most of the victims are lower income and/or from minority groups, which means Team Dem can ignore them on the usual assumption that they have nowhere else to go. It is also harder to create an effective coalition across disparate economic, geographic, and age groups
But the experience of the post-Civil War South says things could get a lot worse. From Matt Stoller in 2010:
A lot of people forget that having debt you can't pay back really sucks. Debt is not just a credit instrument, it is an instrument of political and economic control.
It's actually baked into our culture. The phrase 'the man', as in 'fight the man', referred originally to creditors. 'The man' in the 19th century stood for 'furnishing man', the merchant that sold 19th century sharecroppers and Southern farmers their supplies for the year, usually on credit. Farmers, often illiterate and certainly unable to understand the arrangements into which they were entering, were charged interest rates of 80-100 percent a year, with a lien places on their crops. When approaching a furnishing agent, who could grant them credit for seeds, equipment, even food itself, a farmer would meekly look down nervously as his debts were marked down in a notebook. At the end of a year, due to deflation and usury, farmers usually owed more than they started the year owing. Their land was often forfeit, and eventually most of them became tenant farmers.
They were in hock to the man, and eventually became slaves to him. This structure, of sharecropping and usury, held together by political violence, continued into the 1960s in some areas of the South. As late as the 1960s, Kennedy would see rural poverty in Arkansas and pronounce it 'shocking'. These were the fruits of usury, a society built on unsustainable debt peonage.
Sanders has made an issue of student debt, but politicians who want big bucks from financiers and members of the higher education complex pointedly ignore this issue. As we've pointed out, top bankruptcy scholar Elizabeth Warren won't even endorse a basic reform, that of making student debt dischargable in bankruptcy. So it may take student debtors becoming a bigger percentage of voters for this issue to get the political traction it warrants.
1 Higher estimates typically included near subprime mortgages then called "Alt A".
Geo , October 18, 2018 at 5:02 am
There are many, many passages in this obscure old book called The Bible speaking of usury as a grave sin. So many it is actually one of the most clear and condemned sins in the entire book. Maybe we could see if any of our Congress persons have ever heard of it? They could learn something from it regarding this topic.
That said, it's passages on gender equality and family structures are pretty outdated and abhorrent so I wouldn't want them to get any bad ideas from this book on those subjects.
Neujack , October 18, 2018 at 5:56 am
Indeed, all of the old "Iron Age religions" (Judaism, Early Christianity, and Islam) explicitly denounce usury.
The great irony of the Deep South in te USA is that they've been frequently banning Sharia law, even when Sharia law is one of the few types of law in the world which explicitly bans charging interest.
L , October 18, 2018 at 9:57 am
It is always intriguing how many politicians are so eager to endorse a literalist fealty to the social structures of the bible but ignore, or even vehemently rail against, the more balanced social restrictions on things like usury or the old idea of a debt jubilee. But then Jesus himself railed (physically) against embedding money in religion and now we have "entrepreneurial churches" who preach a "doctrine of prosperity" so I guess times have changed.
xformbykr , October 18, 2018 at 11:23 am
Michael Hudson wrote about the history of 'debt jubilees' and debt cancellation today.
Pete , October 18, 2018 at 5:46 am
I graduated 10 years ago and the most frustrating part was everyone telling me it would be alright and ignoring thw whole you never recover thing. I am still unable to find worthwhile employment and probably never will be able to.
kurtismayfield , October 18, 2018 at 6:56 am
You really can't listen to many of us over 40.. we really lived in complete my different conditions. When I got out of college in the 90's they were basically hiring everyone with a pulse in tech. From what I have seen from recent graduates it's getting easier, as I am seeing a lot more intershops turn into job offers. But for the generation that you are part of, it's an economic hole that may never be recovered from simply because you were born at the wrong time.
Looking at that graph, notice how the only debt that is backstopped completely by the federal government is growing the fastest. The no default on student loans rules have to be rescinded.
Big River Bandido , October 18, 2018 at 10:05 am
I graduated in the 1990s, and if you were not in tech, the job market was just as lousy as it is now.
The Rev Kev , October 18, 2018 at 6:13 am
Extrapolating from these trends, then in a few years the only young people that would be able to afford higher education in the United States would the the children of the ten per cent – plus a smattering of scholarships to talented individuals found worthy of supporting. It follows then that as these educated people entered the workforce, that over time that the people that would be running the country would be children of the elite in a sort of inbred system. It sounds a lot like 19th century class-based Britain that if you ask me.
As for the country itself it would be disastrous. Going by present population levels, it would mean that instead of recruiting the leaders and thinkers of the country from the present population of 325 million, that at most you would be recruiting them from a base level of about 30-40 million. It is to be hoped that these people are not from the shallow end of the gene pool. You can forget about any idea of an even-handed meritocracy and America would be competing against countries that might employ the idea of a full meritocracy in the recruitment of their leaders. I wonder how that might work out.
Brooklin Bridge , October 18, 2018 at 6:46 am
You could put that whole paragraph in the present tense quite nicely.
Eclair , October 18, 2018 at 6:56 am
"I wonder how that might work out." Ummm . the Monty Pythons had an idea in the 1970's.
The "Upper Class Twit of the Year" competition. Gotta love the "Kick a Beggar" event.
Henry Moon Pie , October 18, 2018 at 5:13 pm
"America would be competing against countries that might employ the idea of a full meritocracy in the recruitment of their leaders. I wonder how that might work out"
Would the performance of U. S. men in international soccer competition be a similar situation?
eg , October 18, 2018 at 6:40 am
Why is America so determined to reconstruct an aristocracy its founders abhorred?
zagonostra , October 18, 2018 at 8:41 am
They only abhorred the British aristocracy, they framed to Constitution to create a home grown one; and, they succeeded beyond their wildest dream.
Matthew , October 18, 2018 at 10:00 am
Because they think it will help them stay rich?
Big River Bandido , October 18, 2018 at 10:06 am
an aristocracy its founders abhorred
Alexander Hamilton liked the idea very much. It's why the musical is SO popular among the neoliberal set.
KYrocky , October 18, 2018 at 11:47 am
The concept of student debt as it exists today would be repulsive to our Founders. Not just for the larger issue of our country being on the trajectory of becoming an economic aristocracy, but specifically because the Federal government is profiting tremendously from this crushing usury being applied to majority and the least among us.
Our Founders had no problem with the conquest and seizure of Native Americans land, and they fully respected the rights and claims of other European countries to do the same. One of their strongest repudiations of the aristocracy was the expansion of private property rights beyond what was known under any monarchy on the planet to that point in history. In the pre-industrial world the vast majority of people lived in an agrarian society and economy. Owning land secured you with your livelihood, your living, and much of your resources; it fully supported most families.
For its founding and for generation after generation the United States government gave land to countless men for military service, government service, homesteds, etc. Expansions by the Louisiana Purchase and war and treaties with other European nations, quickly resulting in making these lands available for settlement to our citizens and to immigrants.
The point is that for well over 100 years the government provided to its citizens a huge amount of what our citizens needed to live their lifetimes through these grants of land. These land grants were then passed from generation to generation and formed the economic foundations for millions of people, their children and their next generations.
Our Government did this.
The United States ceased to be a predominantly agrarian country in the mid 20th century. But they did not stop aiding our people and their economic needs. Our government (Federal and states) did continue to provide to our population through public education (very affordable college), the GI Bill that served millions with income, housing and educational benefits, Social Security, Medicare, etc.
Since our country's very founding our government has recognized the benefit and need to facilitate the support of its citizens. The American economy became the greatest on earth because of our land conquest heritage and our collective investments as a nation. No one did it all on their own, and no one pretended they did.
Reagan killed this legacy. Reagan claimed that our nations success and our heritage was built on our history of rugged individualism and that our government was the obstacle to returning to these roots. It was a lie; nothing could have been further from the truth.
Student debt, as it exists to day, is crippling the economic futures of the millions who have accrued this debt and the millions to come, year after year, who will do the same. The student is debt is robbing our nation of the economic activity that historically matriculated out from those passing from college to the world. That has come almost to an end. Worse yet, our government has positioned itself to also profit off this debt, and to prevent the indebted from escaping this type of debt through the legal means available for virtually all other forms of debt.
Our student debt is un-American. It is a cancer on our economy. It exists for the vast short term profit of the few at the expense of our nations future.
Avalon Sparks , October 18, 2018 at 12:04 pm
Amazing essay, thank you!
zagonostra , October 18, 2018 at 12:49 pm
Admirable and well thought-out post.
I hope people keep in mind it was the Democrats, specifically Joe Biden, who made student debt even more crippling and heartless by changing the bankruptcy laws so that creditors can garnish your Social Security benefits (assuming Mitch McConnell doesn't gut them first).
Republicans are open about what they hope to accomplish, you have to clear the verbal BS that clouds what Democrats are after, but at the end of the day they are both about enslavement and debt bondage over unwashed masses.
Mobee , October 18, 2018 at 7:32 am
I'm sure it's often the parents that end up paying the debt, as my sister is doing. Parents have deep pockets and are desperate to help their loved ones get a good start in life.
In my sister's case, they sent their girls to private high school, where they spent the money that could have paid for college. Not a smart decision. But they love their children and really wanted to do give them the best.
Now the girls are struggling to make a living and my sister cannot afford to retire.
Musicismath , October 18, 2018 at 8:18 am
There are so many feedback loops, multipliers, and perverse incentives driving forward this bubble (and its calamitous social and cultural effects) that it's hard to know where to begin.
As Goldman Sachs have pointed out , student-loan-based securities are increasingly "attractive" investments for speculators:
Although the "bubble" is getting bigger, it's not a risk to overall financial stability, Goldman's Marty Young and Lotfi Karoui said in a recent note. In fact, there's one segment of the market that's emerging as an attractive investment.
It's the $190 billion of outstanding [student] loans that are held within asset-backed securities (ABS) refinanced by private lenders such as SoFi.
With these securities, lenders pool loans that have similar risk profiles and sell them as instruments in the public markets. Investors profit as graduates pay back their principal and interest.
So the more student debt there is, and the higher the interest rates are, the better, from that perspective.
It's undeniable, too, that high student loan burdens mean graduates are slower to form households and will probably have fewer children than they would otherwise. Their diminished spending power, meanwhile, adds to the ongoing erosion of the "real economy," in favour of the financial one. Student loans therefore disrupt the basic means of social reproduction. The resulting declines in fertility then demand high rates of immigration to compensate. A fact cheered on, inevitably, by the open borders crowd (a substantial number of whom, oddly or not, seem to work in or for universities).
So we see yet another instance in which "right" neoliberalism and "left" identitarianism go hand in hand–forming, indeed, two heads of the same beast. Student loans have enabled the enormous inflation in tuition costs that have plagued the Anglosphere over the last couple of decades. This fees income feeds the academic beast (or at least its administrators and senior managers), while driving the one economic and social crisis (mass migration and the resulting populist backlash) that "left neoliberals," centrists, and Clinton/Progress types appear to care about. It's a self-licking ice cream of catastrophic size and reach.
Petunia , October 18, 2018 at 9:09 am
One specific example: hospital chaplains are facing a big retirement crisis. And yet the job requires (to be hoard certified): an undergraduate degree & then a Master's of Divinity degree, plus a year-long residency. For a job that pays around $60,000 to $70,000. At least one school, Princeton, funds almost all of their divinity students. But I don't think it's the norm. And then you throw in the fact that such person ideally would be emotionally & spiritually mature, with enough life experience to meet with a wide range of people, who are often facing financial hardship due to being sick (as well as existential concerns). I don't even know how to begin reframing the job or the qualifications or the salary to fit America in 2020. There are a lot of other angles, such as: what about well-qualified people who can't afford seminary? I know there needs to be a way to screen-out and screen-in the best people (who won't proselytize), but is a Master's degree the right hurdle? But, I must say, the need for access to interfaith Spiritual Care is only increasing, as times get tougher & other hospital staff (RNs) don't have time to sit and listen. People are in pain, not only in their bodies. One thought leader in the field has speculated that the job will just go away due to lack of advocacy & inability to evolve into a profit center.
redleg , October 18, 2018 at 9:23 am
It would be interesting to see that student loan debt chart superimposed over %adjuncts and number of administrators. Its pretty easy to guess what that would look like, but seeing that would be decisive.
Fiddler Hill , October 18, 2018 at 2:39 pm
I think a little delineation is in order. I've been an adjunct professor and believe the increasing use of adjuncts at universities has been very beneficial overall -- in terms of the quality of education students are getting. Unfortunately, as we know, that's not why universities are hiring so many more adjuncts; they're being hired because schools can get away with paying them abysmally.
The situation is so embarrassing that, at the university where I was teaching five years ago, the full-time faculty passed a resolution asking the administration to give the entire projected increase in teaching salaries entirely to the adjuncts, an amazing act of selflessness.
The relevance to our discussion here, of course, is the insupportable increase in the annual cost of attending college even as the schools radically reduce their overall expenditures on faculty salaries.
Di Modica's Dumb Steer , October 18, 2018 at 9:49 am
So how long before this leads to a mass "We Won't Pay" movement? I'm stuck on the dumb treadmill myself, but I wouldn't begrudge an entire generation for just saying no. Sure, they can garnish wages and the like, but if 30 million people simultaneously say 'eff this', it's more than just a wrench in the works it's drastic enough to force action.
DolleyMadison , October 18, 2018 at 10:45 am
Why DO they keep paying? The debts are always bought by debt collectors who don't even have COPIES promissory notes. Let them sue you and show up for the hearing and demand proof. They can still ruin your "credit" but if student loans haven't taught you to eschew credit nothing will. If EVERYONE "walked away" what could they do?
Tangled up in Texas , October 18, 2018 at 11:01 am
Unfortunately that is never going to happen. This society has been trained to worship at the altar of the FICO score, and most job seekers cannot afford to have a low score. Said score will be examined and potentially held against you when pursuing employment.
Also, employers frown upon employees who do not pay their bills and then have their wages garnished – at least the smaller emlpoyers do. This creates extra work for the employer and makes the employee suspect, as in irresponsible.
This problem was created by the political class and is going to require a political solution, i.e. legislation to assist the student loan borrower or a debt jubilee. Unfortunately, there's too much money being made off the student borrower – even if the practice is killing the host. And the "I got mine" crowd will not allow a jubilee even if it is for the greater good of society. Lastly, student loan borrowers coming from a different era (who have paid off their loans) will begrudge the forgiving of the loans and consider them undeserved. In this case, perhaps the best resolution is to give everyone money toward their student loans – whether they are currently paid or unpaid.
I cannot jeopardize my employment by joining in a "eff this" movement as much as I would like to. Instead, I will continue on this treadmill called life, pay my bills and hope to escape as unscathed as possible.
Harrison Bergeron , October 18, 2018 at 1:42 pm
I work for a company that contracts with department of Ed to get student loan borrowers out if default and back into the hands of loan servicers. The amount of money sloshing around is stunning. I'm sure they've got well paid lobbyists telling legislators that people will be unemployed if student loans are reformed. I owe well over six figures so the irony is not lost on me. Hiring one half of the working class to debt collect from the other.
Tomonthebeach , October 18, 2018 at 2:58 pm
Who pays for diploma-mill educations, and why? I have always assumed that people attended cash-n-carry schools because they did not qualify aptitude/grade-wise for entrance to a state school, OR a 3rd party like DOD or VA was footing the tab. Both assumptions appear to be supported by data. Given the far-above-average drop/flunkout rate of diploma mills. I know from my military career that enlisted members sign up for courses (local or online) at diploma mills to get extra points toward promotions – at Navy expense. Personally, I would not pay to send my dog to such institutions to learn how to sit up and beg.
One thing is certain, collich kidz do not appear to spend nearly as much time researching where they go to $chool as they do buying the car they drive.
Democrita , October 18, 2018 at 3:45 pm
Jumping into the conversation a little late, but my alma mater recently embarked on a major rethink of the college business model, and cut tuition from around 50k to around 30k. We even got a writeup from Frank Bruni for it .
College officials (I'm relatively active as a fundraiser for my class) describe it as a shift to a "philanthropy model" of funding. Which worries me for lots of reasons. But at least it's a conversation-starter.
It's also very much a school that is not for people looking to buy a future income flow, but rather an education.
Jun 17, 2019 | finance.yahoo.com
I have $235,000 of student debt. The first $120,000 came with a bachelor's degree from my state school. Another $70,000 or so came with my master's degree. The remainder is accrued interest.
The suggested minimum monthly payment on my private debt alone is approximately $1,200. For reference: that's nearly rent for the 600-square-foot apartment where I live with my partner in New Jersey.
Without income driven repayment, the minimum payment amount for my federal student debt would be around $1,000.
I would have to begin devoting half of my income to debt payment if I cared to pay it off by 2042. I can't do that because I make just under $4,000 per month. And that income is a fairly new development in my life. Why would I choose to pay down my debt if it meant I wouldn't be able to afford basic living expenses?
Short of winning the lottery, there's no way I could ever afford to pay off my debt. And though I have a higher debt burden than most, I'm certainly not alone.
One in four American adults has student debt . And that amount will grow over the coming years. Seven in 10 college graduates are now graduating with student debt , with the greatest burden falling on people of color , low-income borrowers , and women .
Meanwhile more and more people can't make their minimum payments.
The price of a college education has quadrupled since the 1980s while wages haven't budged and rents went up by 50 percent. No wonder nearly 5 million American are in default on their student loans. At this rate, 40 percent of borrowers are expected to be in default by 2023.
I'm privileged to have made it through the first few years of repayment. With a financial hardship agreement with Sallie Mae, my parents – cosigners on my private loans – pay $600 per month to keep default at bay from our family and allow me to live a decent life. And through an income driven repayment plan (IDR) with Navient, I've been paying less than $50 per month on my public loans, though that could change as my income changes.
My parents cosigned my loans because we're first-generation immigrants. Moving to the U.S. was about giving me a chance to live my best life. College was a critical component and we couldn't afford it any other way. The only reason they can afford those $600 monthly payments now is because they paid off their 30-year mortgage just a few years ago.
My parents are in their 60s and 70s and will live the rest of their lives with my student debt. Likely so will I. Again – we won't be alone.
Three million Americans over the age of 60 are paying off student debt . Approximately 40,000 of them are having Social Security or other government payments garnished .
College was supposed to be about getting ahead in life. But it's become a driver of inequality . It does not have to be this way.
Some economists say that forgiving student debt would boost GDP by $100 billion per year for ten years and add several million jobs to the economy. It would unlock the capacity of 44 million Americans to buy homes , launch small businesses , and retire with dignity.
Congress could pay for it by repealing the $1.5 trillion tax cut it passed in 2017. Primarily benefiting the wealthy and corporations, even Goldman Sachs says that whatever economic boost the tax cut brought with it has passed.
And to keep future generations from suffering under the burden of student debt, Congress could make public colleges, universities, and trade schools in the United States free.
The federal government already spends $80 billion per year on grants and tax breaks for students pursuing higher education. It spends another $100 billion every year issuing new student loans.
That's $180 billion the U.S. could stop spending on a broken system if it decided to invest it in a new one. Coincidently, that amount is more than enough to cover the cost of that new system.
Tuition at public institutions of higher education totals $63 billion . Add cost of living and that number reaches $127 billion . With the remaining $53 billion, the U.S. can invest in expanding access to higher education with job training and small business accelerators.
Until then, I'm focused on keeping the cost of servicing my debt low while I do other things a 29-year-old should be doing, like saving for an emergency fund or a down payment on a house.
I'm spending my money in a way that invests in my future. Can the country do the same?
J Jive Turkey 7 hours ago$235k for a job that pays less than $48k/year. I'm sure there was no cheaper way to go about this, like, say, taking general education credits at a community college before transferring over to the 'State School'. Millennials are awesome.
W WillyWonga 7 hours agoI had around $3K in student loan debt when I graduated. That's because I received some grants (partly based on my grades) and I WORKED...and WORKED SOME MORE...while I was studying. Two P/T jobs that were the equivalent of a full-time job, maybe more on certain weeks, whenever I could get the extra work.
My parents didn't co-sign anything for me. My dad passed long before I graduated high school, and my family home went into foreclosure so my mom had a horrible credit rating and didn't have two dimes to rub together.
Your story is an example of why we should NOT forgive student loan debt. No one forced you to take the loans out, and given your somewhat cavalier attitude towards it there's a good chance you'll ring up debt someplace else and expect others to pay for that too.
J James 6 hours agoI'm playing my tiny little violin for you. I worked night shifts to pay my way through college. Then for my second degree in engineering, I co-oped and graduated with money in the bank. Seven years of 60 hour weeks, but it was worth it. I retired in my mid-50s.
j jim 7 hours agoso a state school plus masters and you are making $4k a month? And "Some economists say that forgiving student debt would boost GDP by $100 billion per year for ten years and add several million jobs to the economy" Sure in the Bernie Sanders way of how things work.
R R 5 hours agoGot to call BS on the 120k debt from a "state school". This is a problem with the younger generations. They do not want to work while going to college so they take out a ton of loans and then complain when they get out and have a life long debt barring some windfall. I say the issue is the government and companies giving these loans without making sure they pay them back. That is an investment for them so they should have programs to help them stay on track and make sure they get well paying jobs. I retired from a company after 32 years at 50. They paid for my education and I moved up the ladder pretty fast. I was over their clinical labs when I retired and I started in the warehouse.
T Theo the Cat 7 hours agoI do not understand how you got $120k of debt attending a state school for undergraduate. Either your stayed there 6 or more years or you basically earned no money during any summer or school year of your entire undergraduate and went to a really expensive school.
R Really 7 hours agoMaybe your partner ought to be helping you pay off your debt. I helped my partner. That's how "partner" is defined. Also, the notion that if we all absorb your debt will allow you to buy a house, I say, BS. I don't want to take any risk financing your house buy (through any government support -- FHA, VA, FDIC insurance on banks covering your mortgage, etc.) since you were not good for your student loan debt. No way.
P Paul 7 hours agoMy kids are in their 20s and they are in community school to get associate degrees. They wanted to go to a university and get bachelor's but we can't afford it. So we lived within our means and our kids deprived themselves of that "college experience". And now thru our taxes, we will have to pay for someone else's student loans? How is that fair?
D Dustin 6 hours agoTypical millennial....doesn't want to have to pay for anything. My wife and I are in our 40's and we made the last payment on her student debt this year. I didn't complain about it for the last 15 years, I just paid it off.
P Pete 7 hours agoThe parents busted their hump to pay off their mortgage then get saddled with a $600 per month payment because of the kid's degree that lead to nowhere?
Jun 15, 2019 | www.theamericanconservative.com
Clyde Schechter, says: June 14, 2019 at 4:58 pmBack in the 1960's as the Cuban missile crisis was brewing, JFK conferred with then French president Charles DeGaulle and offered to show him the reconnaissance pictures showing the Russian missiles in Cuba. DeGaulle is said to have replied "No, I do not need to see pictures. The word of the President of the United States is enough."David Harrell , says: June 14, 2019 at 9:50 pm
It's impossible to imagine anyone saying that today, unless they still believe in the tooth fairy.It very well could an act by a state that according to an elite Army warfare college, is "known to disregard international law to accomplish mission" and also a "wildcard. Ruthless and cunning. Has capability to target U.S. forces and make it look like a Palestinian/Arab act."Janwaar Bibi , says: June 14, 2019 at 11:11 pm
What state? See "U.S. troops would enforce peace under Army study," Washington Times, September 10, 2001.A few years ago, Sheldon Adelson wanted the US to drop a nuke on Iran. Video below. What Sheldon wants, Trump the errand-boy delivers. The fact that the US public is overwhelmingly against a war with Iran is completely irrelevant.Sydney , says: June 15, 2019 at 3:02 pm
https://www.youtube.com/embed/6sCW4IasWXcYes, Iran is to be blamed! Absolutely true, US President himself said so!Lily Sandoz , says: June 15, 2019 at 3:08 pm
Let's look at some facts and then deductions. So, the US drone was following the Iranian boat. Iranians saw the drone, fired at it and missed. Regardless, they continued their "journey" to the tanker, all the while their supreme leader was trying to persuade Abe to help Iran.
Tump: It was Iran the terrorist nation, not leaders but the nation. Not long ago Trump lauded Iranians as very nice people. If the drone was there, why don't we see the beginning of the boat's journey and then where that boat with the mine went? According to Mr Pompeo and Mr Bolton, the nation of terrorists is not only evil but stupid too. Yet no other actor in the region has the sophistication to perform such an act (that is stupid act) – according to Mr.Pompeo. Hm who else, I wonder would be interested in bringing down Iran? I can't think even of one such actor.Lest we forget. Gen. Wesley Clark's revelation. This was first revealed to General Wesley Clark in 1991 by neo-con Paul Wolfowitz. The seven countries which were to be invaded and blessed with regime change were Iraq, Libya, Syria, Lebanon, Somalia, Sudan, and the big prize, Iran with its wealth of resources and potential market of over 70 million persons.This same plan was revealed again to General Clark during a visit to the Pentagon ten days after 9-11, the event that presented the neo-cons, and no doubt others behind the scenes, with their Pearl Harbor, their justification to proceed with the plan, somewhat conveniently. You can see Clark say it in person on YouTube if you don't believe it.grumpy realist , says: June 13, 2019 at 5:26 pmThe only thing missing is a bunch of Iranian passports "just accidentally found" near the ships with a big floating arrow pointing towards them, just in case we're clueless. If we get dragged into a bunfight with Iran because of this we deserve all the opprobrium anyone hurls at us–if only for our outright stupidity.cdugga , says: June 13, 2019 at 5:35 pmWho exactly wants the US to go to war with Iran? Iran?Whitehead , says: June 13, 2019 at 5:52 pm""This assessment is based on intelligence [I think we already know what the Saudis and Israelis want us to think], the weapons used [which were what again?], the level of expertise needed to execute the operation [more than what was needed to prove the existence of fake WMDs], recent similar Iranian attacks on shipping ['Iranian attacks' according to who, exactly?], and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication [so sophisticated there's no evidence they did it]," the Secretary said, without taking questions [or citing proof]"Chris in Appalachia , says: June 13, 2019 at 5:57 pm
He doesn't even bother with a Colin Powell style PowerPoint to convince us he believes any of the horsesh!t he's peddling. Real contempt for the American public.Probably a 50/50 chance it was an American-Saudi-Israel false flag.Marky Mark , says: June 13, 2019 at 6:02 pmIt's always something maritimemark_be , says: June 13, 2019 at 6:02 pm
Not a lot of witnesses, but heavy on consequencesLet's quote that fellow with the little moustache, shortly before he ordered the invasion of Poland: "I will provide a propagandistic casus belli. Its credibility doesn't matter. The victor will not be asked whether he told the truth." To think that the only obstacle between peace and war is a president too stupid to understand that he brought this on himself.EarlyBird , says: June 13, 2019 at 6:20 pmIt's very sad that I trust the word of the Ayatollah Khameni more than the President of the United States or any of his spokesman. The proxy which had the weapons, level of expertise needed to execute the operation, resources and proficiency to act with such a high degree of sophistication is called the Central Intelligence Agency.Kirt Higdon , says: June 13, 2019 at 6:32 pmReeks of false flag pretense by the neo-cons for war! Betting the US, Saudis or Israelis are responsible for this – perhaps all of them.Sid Finster , says: June 13, 2019 at 6:37 pmHow utterly convenient! Abe is meeting with the Iranian leadership, what better time to attack Japanese tankers (what better time for Saudi Arabia, Israel and the neocons, that is)? Not 24 hours go by after the supposed attack and Pompeo already knows who did it and has a response ready. Why, it's almost like his mind were already made up! (But when it comes to, say, that Saudi prince who chops up journalists, it seems that we can never ever ever really know what happened!)Whine Merchant , says: June 13, 2019 at 6:44 pm
Just like how the Reichstag Fire took place and by pure happenstance, the Nazis had the Enabling Act all ready to go.
Sarcasm aside, everyone knows that Pompeo is lying, looking for an excuse to escalate tensions. The question is whether anyone will do anything about it.Jarred says that Bibi swears it wasn't Mossad, and Pompeo knows the pecking order in the White House, so he parrots the party line.JEinCA , says: June 13, 2019 at 6:51 pmIf I was a betting man I'd put my money on the "actual" culprits being Mossad, CIA, MI6 or any combination of the three. The Neocons and Zionists in Washington are traitors to our Constitutional Republic! Don't let them drag us into another foreign war for Israel!Gene Smolko , says: June 13, 2019 at 7:05 pm
Remember the USS Liberty! Never Forget!Anyone believe this warmongering liar?Krishnan Venkatram , says: June 13, 2019 at 7:09 pmIt is not unreasonable to smell a Bolton/MEK sized rat in thisdstraws , says: June 13, 2019 at 7:27 pmAnd so it begins. An unwarranted accusation by a war-hawk, surprise.. surprise.Myron K Hudson , says: June 13, 2019 at 7:28 pmThis is stupid and reckless enough to be the work of Saudi Arabia. Or Bolton and Pompeo.Kurt Gayle , says: June 13, 2019 at 8:42 pmJason Ditz, the News Editor at Antiwar.com reports: "Pompeo's declaration of Iran's guilt was based chiefly on similar incidents happening in mid-May. John Bolton and Pompeo blamed Iran then, and since this was the same sort of thing, they blame Iran now. The problem is, they have offered no evidence Iran was responsible for the first incidents, let alone today's, and are just tying them all together. Pompeo rattled off a list of things to blame Iran for, including multiple incidents that were done by Yemen's Houthis, a rocket fired in Iraq that was never convincingly blamed on anyone, and an Afghanistan bombing that clearly was nothing to do with Iran at all."Janwaar Bibi , says: June 13, 2019 at 9:01 pm
Jason Ditz goes on to report: "The big questions are, as always, motive. Iran has no conceivable reason to attack such ships. In this case, one of the ships is even Japanese-owned. Japan is a very important trading partner of Iran, and Japan's prime minister Abe Shinzo is visiting Iran right now, trying to reduce tensions. Abe has also declared Iran to have no intention to make nuclear arms. This would be a preposterous move for Iran to even consider. Iranian Foreign Minister Javad Zarif declared that 'suspicious doesn't begin to describe' what happened, noting that the attacks were timed to when Japanese PM Abe Shinzo was meeting with Iran's Supreme Leader. Abe's meeting was also a subject of Pompeo's comments, as Pompeo falsely accused Ayatollah Ali Khamenei of having refused the meeting with Abe. In reality, the meeting took place, and Khamenei simply rejected a proposal to trade messages with President Trump. Pompeo went on to declare the attack on a Japanese ship during Abe's Iran visit as an Iranian 'insult to Japan.' This all rests on the US assumption of Iran's guilt, and as Zarif points out, makes the attack look suspiciously like it might have been carried out for the benefit of the anti-Iran narrative. "
https://news.antiwar.com/2019/06/13/two-tankers-attacked-in-gulf-of-oman/I read somewhere that the Iranians used weapons of mass destruction given to them by Saddam to attack the USS Maine in the Gulf of Tonkin, taking American lives on American soil.Myx , says: June 13, 2019 at 9:15 pmWhat was that headline in the Onion? "An attack on Japanese oil tankers in the Gulf of Oman is an attack on America itself?"Inspector General , says: June 13, 2019 at 9:20 pmOdd that just yesterday I watched the video entitled, "Debunking a Century of War Lies."Ken T , says: June 13, 2019 at 9:52 pm
I had forgotten that basically all wars are "protected by a bodyguard of lies," according to the video. Most poignant to me was the Iraqi woman pleading to Congress about Sadam Hussein's destruction of incubators, which George HW Bush later referenced as the "babies strewn about the floor like firewood." Except it was all fabricated by a PR firm!cui bono ?PAX , says: June 14, 2019 at 12:09 am
Is anyone really that delusional to believe that Iran is going to attack a Japanese tanker while the Japanese PM is meeting with the Ayatollah? The ONLY explanation that makes sense is that it was planned in the White House by Pompeo and Bolton. Whether it was with or without Trump's knowledge and approval is irrelevant. P & B have been openly salivating for any excuse to start a war with Iran, and Trump has given them free rein. It is a war crime, and all three are guilty.The USS Liberty is spot on. That was our Versailles Treaty and Johnson ceded much of our foreign policy and intelligence to Israel – we capitulated and have continued to capitulate to Israel. Things are looking grim and look like a repeat of Iraq. What can stop this momentum to war?Iron Felix , says: June 14, 2019 at 12:10 amWell, it seems that just about 100% of those who comment here have this figured out. Once these things were a bit more sophisticated, but now the Empire doesn't seem to care if its schemes are blatantly transparent.Jiyushugi , says: June 14, 2019 at 12:47 am
Abe has been closely consulting with Trump and the Iranians as a go-between to create the conditions which can allow Trump to save face now that Bolton's and Pompeo's campaign against Iran is a big fat failure.
It is clear who hopes to gain by this little stunt, which will not go anywhere. Abe is certainly not going to be fooled by any of this. Don't expect the WaPo or the NYT to expose this obvious false flag.What a shame that more Americans haven't read 'The Rise and Fall of the Third Reich', by William L. Shirer ..Daath , says: June 14, 2019 at 2:08 amIran is a rather divided country, and some groups regard USA with as much hatred and suspicion as the neocons hold towards them. The responsible party might have been IRGC, intending to raise tensions enough to make their government's current fence-straddling act unviable and force them to scrap the JCPA.Brian Villanueva , says: June 14, 2019 at 2:15 am
I'd try to avoid the logic that it must have been Saudis/Israel/USA, because if it was Iran, the likes of Bolton would somehow be in the right. They're not. So far, Iran hasn't been the one responsible for the vast majority of provocations, and even if it elements on their side were did this, the chickenhawks running USA's national security won't bother to secure proof before escalating. It's not a secret that they want war and aren't particularly picky about how they get it.Saudi Arabia. The other agencies speculated here are off the mark: Israel would fear getting caught, CIA leaks like a sieve, MI6 has no incentive. But the Saudis? They have the combination of economic incentives, religious hatred, technical knowledge, advanced (American) weaponry, and who-gives-a-crap-if-we-get-caught attitude.Deacon Blue , says: June 14, 2019 at 3:19 amIn these matters, I know who NOT to believe.HenionJD , says: June 14, 2019 at 7:14 amAnd I have a bridge to sell y'all.Kent , says: June 14, 2019 at 8:50 amResults:Kurt Gayle , says: June 14, 2019 at 8:52 am
1. US attacks Iran on false pretenses and the world knows it.
2. Iran destroys shipping through the Straits of Hormuz.
3. Gasoline goes to $10/gallon, if you can find it.
4. The world's economy collapses, with international debt collapse and a global run on banks.
5. Unemployment goes to 25% and prices go through the roof as the dollar collapses in value and the US can't afford to import Chinese products.
6. Bernie Sanders is elected president, and the US becomes a democratic socialist state.
Way to go there Donnie.This updated post from "Moon of Alabama" is definitely worth reading: "Today's Attacks On Ships In The Gulf Of Oman Are Not In Iran's Interest – Or Are They? (Updated)": https://www.moonofalabama.org/2019/06/todays-attacks-on-ships-in-the-gulf-of-oman-are-not-in-irans-interest.html#moreSam , says: June 14, 2019 at 8:53 amGiven Iran's history of endless deception in their nuclear weapons development program, might all these suggestions of these attacks being an American fabrication be a bit premature? How about even a tiny bit of objectivity? Or did Larsen write all these comments? (:TheSnark , says: June 14, 2019 at 9:02 amI have a question about the video footage supposedly showing Iranians removing a mine from a tanker. The quality of the picture is no better than that we saw back in the 1965 Tonkin Gulf incident, when N Vietnamese boats allegedly attacked a US Navy ship. But that was 54 years ago. In video technology today 1080p is a standard resolution, 4k is pretty common. Why is the US Navy still showing something that looks like it came from my Dad's 8mm home movie set-up?Kurt Gayle , says: June 14, 2019 at 9:55 amMaybe Colin Powell can come out of retirement and deliver the US/neocon presentation at the UN Security Council: https://www.youtube.com/embed/Rp6WuTSTyS8FJR - Atlanta , says: June 14, 2019 at 9:58 amEven Jesse Smollett isn't buying this.Sid Finster , says: June 14, 2019 at 10:23 amSam wrote:Sid Finster , says: June 14, 2019 at 10:24 am
"Given Iran's history of endless deception in their nuclear weapons development program, might all these suggestions of these attacks being an American fabrication be a bit premature? How about even a tiny bit of objectivity? Or did Larsen write all these comments? (:"
What "history of endless deception"? Every third party has confirmed that Iran has complied strictly with the JCPOA.
The United States, on the other hand, has a long track record of blatant lies to get the wars it seeks ..@The Snark:Mark B. , says: June 14, 2019 at 10:46 am
To quote myself, sorry "how utterly convenient!" Haven't we been reading a lot about deepfakes lately?@ KentBarry , says: June 14, 2019 at 11:00 am
Exactly what I am hoping for IF the US attacks Iran. All depends on the Iranian capabilities to cripple the flow of oil from the ME. So I say: Go Iran, make us pay! And don't forget to throw some missiles on the royal Saudi palace and Riyad. Make that a few dozen. Or hundred.SamKurt Gayle , says: June 14, 2019 at 11:02 am
"Given Iran's history of endless deception in their nuclear weapons development program, might all these suggestions of these attacks being an American fabrication be a bit premature? How about even a tiny bit of objectivity? Or did Larsen write all these comments? (:"
The only person whom I can recall endlessly deceiving on this is Benjamin Netanyahu, whom I recall making speech after speech claiming that Iran was just about to have nuclear weapons. He's been doing that for over a decade now.
As for incentives/disincentives, Mossad doesn't have much disincentive. If they are caught, they and their friends in the USA will scream 'Fake News!'.
Mr. Bone Saw has got to be extremely cocky now.
And both of them could reasonably expect that if they succeed in triggering a US-Iran war, that even later exposure wouldn't matter.Yesterday (June 13th) Rep. Tulsi Gabbard (D-Hawaii), a Democratic candidate for President in 2020, was interviewed by the Washington Post's Robert Costa. Here (at 23:58-28:06) is a brief excerpt of Rep. Gabbard's excellent views on US Iran policy:Zgler , says: June 14, 2019 at 11:41 am
https://www.youtube.com/embed/W0KGWFA_idUWho wants war? Saudis to prop up oil prices and get Iran in trouble? Pompeo because he wants to bring on the Rapture and the return of JC? Donald Trump so he can be a "wartime president" stir up his base and please the military contractor donors? Netanyahu to distract from his corruption charges and weaken Iranian Islamists? Some really stupid underground hardliners in Iran?Zgler , says: June 14, 2019 at 11:43 am
There are some plausible choices but none of them is the Iranian government.I forgot one more who wants war: Bolton because he is an immoral idiot who wants to strut.DennisW , says: June 14, 2019 at 11:52 amI frankly just don't believe anything coming form the US government anymore, especially warmongering neo-cons in charge of foreign policy, the Pentagon, and Deep State actors.JeffK , says: June 14, 2019 at 12:00 pm
What on earth would Iran have to gain from attacking a Japanese oil tanker while their leader is meeting with the Japanese PM? More likely a false-flag CIA operation.@TheSnarkThe Dean , says: June 14, 2019 at 12:22 pm
June 14, 2019 at 9:02 am
"I have a question about the video footage supposedly showing Iranians removing a mine from a tanker. The quality of the picture is no better than that we saw back in the 1965 Tonkin Gulf incident, when N Vietnamese boats allegedly attacked a US Navy ship. But that was 54 years ago. In video technology today 1080p is a standard resolution, 4k is pretty common. Why is the US Navy still showing something that looks like it came from my Dad's 8mm home movie set-up?"
100%. When I heard on the news this morning that there was video showing Iranians, I thought "They have them". Then I saw the video. Now I call BS.Are these the same guys that provided the irrefutable "evidence" of weapons of mass destruction in Iran?Taras 77 , says: June 14, 2019 at 12:26 pm
I am sure that since the Mossad provides us with intelligence in that area of the world, they are completely objective, and have the best interest of the American military at heart.@Snark: I tend to agree that the video raises more questions: -what would be the purpose of a mine above the water line?Sydney , says: June 14, 2019 at 1:06 pm
-why does it take a group of 10-20 people milling about on the bow to remove a mine?
-does 10-20 people really indicate a clandestine effort to remove a mine, more like a clusterf____?
As OffGuardian remarked, does the deep state (cia,mi6,mossad) really think we are that stupid?Why would Iranians attack their own interests? Because they are "evil". Let's see: Front Altair is owned by John Frederiksen, the owner of the Frontline Tanker company, who moved Iranian oil for nearly 40 years including during the "tanker war" with Iraq siding with Iran. Mr Federiksen was called Khomeini's blood life.balconesfault , says: June 14, 2019 at 1:21 pm
What about the Japanese tanker? While the Supreme Leader of Iran was working on Abe to help Iran?
Who's evil, who's stupid?James FallowsKurt Gayle , says: June 14, 2019 at 2:06 pm
Here is the problem with running the kind of govt the US has recently:
When you ask people to *believe* you, or give your "assessments" the benefit of the doubt, there is no reason that they should."Outrage on Capitol Hill over 'completely unacceptable' US-funded scheme to shape Iran debate," The Independent, Wednesday, June 12, 2019:Kolya Krassotkin , says: June 14, 2019 at 2:06 pm
"United States officials say they are outraged by a government-funded troll campaign that has targeted American citizens critical of the administration's hardline Iran policy and accused critics of being loyal to the Tehran regime. State Department officials admitted to Congressional staff in a closed-door meeting on Monday that a project they had funded to counter Iranian propaganda had gone off the rails. Critics in Washington have gone further, saying that the programme resembled the type of troll farms used by autocratic regimes abroad. 'It's completely unacceptable that American taxpayer dollars supported a project that attacked Americans and others who are critical of the Trump administration's policy of escalation and conflict with Iran,' a senior Congressional aide told The Independent, on condition of anonymity. 'This is something that happens in authoritarian regimes, not democracies'."
The Independent article by Negar Mortazavi and Borzou Baragahi continues: "One woman behind the harassment campaign, a longtime Iranian-American activist, has received hundreds of thousands of dollars from the State Department over the years to promote 'freedom of expression and free access to information.' The campaign relentlessly attacked critics of the Iran policy on social media, including Twitter and Telegram messaging app, accusing them without evidence of being paid operatives of the regime in Tehran. A spokeswoman for the State Department told reporters on Monday that funding for the 'Iran Disinformation Project' had been suspended and is under review after it was reported that it went beyond the scope of its mandate by veering from countering propaganda from Iran to smearing domestic critics of White House policy. State Department officials disclosed to lawmakers they had granted $1.5 million for Iran Disinfo, which repeatedly targeted, harassed and smeared critics of Trump's tough stance against Iran on social media.
The Independent article noted: "Among those targeted were American activists, scholars, and journalists who challenged the Trump administration's 'maximum pressure campaign' against Iran. The revelation that US taxpayer money was being used to attack administration critics has now sparked a flurry of queries. 'There are still so many unanswered questions here,' Congresswoman Ilhan Omar wrote on Twitter. 'What rules are in place to prevent state-funded organisation from smearing American citizens? If there wasn't public outcry, would the Administration have suspended funding for Iran Disinfo?' Cold War-era US rules barring the use of government-funded propaganda against American citizens have been flouted for decades State Department officials speaking at the closed-door meeting admitted the project was out of bounds, according to Congressional staffers speaking to The Independent on condition of anonymity. Both Democratic and Republican Congressional staffers were highly critical of the project and questioned whether US officials should continue to work with the contractor, E-Collaborative for Civic Education. The State Department spokeswoman declined to outline steps to prevent such an operation in the future E-Collaborative for Civic Education, co-founded by Iranian American activist Mariam Memarsadeghi, is a long-time State Department contractor "
Foundation for Defence of Democracies and MEK involved in creating fake articles. The Independent continues:
"Congressional officials also confirmed to The Independent that one individual working for the Foundation for Defence of Democracies, an influential Washington organisation with hawkish views on Iran, is part of the E-Collaborative for Civic Education's Iran Disinformation Project Over the weekend, The Intercept revealed that a purported Iranian activist, who had published dozens of articles on Iran in prominent outlets such as Forbes and The Hill, does not exist and is a fake persona run by a team of operatives connected to a bizarre Iranian political cult. The "Heshmat Alavi" persona had a strong presence on Twitter and harassed Iranian journalists, academics, and activists who are critical of the Mujahedin-e-Khalq organisation, a one-time armed guerilla group now holed up in Albania. There is no known link between the Iran Disinfo programme and the fake persona. At least one was cited by the Trump administration as proof against the effectiveness of the Obama-era nuclear deal. Some of the MEK articles were also picked up by US government funded Voice of America's Persian-language service "
https://www.independent.co.uk/news/world/americas/us-politics/us-iran-congress-meeting-money-trump-conflict-a8954191.htmlLet's not forget the lies our great-grandparents were told to inveigle us into WWI: "German troops are raping Belgian nuns" and "German troops are using Belgian babies for bayonet practice."Un Citoyen , says: June 14, 2019 at 3:10 pm
100 years from now a future historian, (probably Russian or Chinese), writing about the collapse of the US, will chronicle how the Americans gullibly believed the war propagandists asserting that Iran fired on oil tankers, which belonged to it trading partner, with the same sense of disbelief we now feel upon reading of the crazy assertions made about German troops.The Japanese ship's captain came out today and said that there was no way the ship was hit by a mine as US claimed, it was hit above sea level and sailors saw something hitting the vessel, like a torpedo.pax , says: June 14, 2019 at 3:13 pm
Why on earth would Iran want to bomb a Japanese ship in the middle of a visit by the Japanese PM?
This whole thing stinks to high heaven.
The US under the rule of the neocons in the Trump admin, the Pence-Pompeo-Bolton trifecta, is a menace and a danger to the whole world. From Iran to Venezuela, Ukraine to North Korea, China to Russia, there isn't a country these neocon stooges don't want to pick a quarrel with. America has become the greatest threat to world peace.Sam – When was the last time Iran invaded another country? Why is Israel pushing so hard for us to fight yet another war on their behalf. As Ron Paul said – if they want to fight Iran – let them, but we must stand aside as they duke it out. Israel has created enough Gold Star mothers in the US. Time to do their own fighting. Larsen and Giraldi make a lot of sense.
Jun 14, 2019 | www.amazon.com
S. Baker 5.0 out of 5 stars Summary/Review of Twilight of Equality November 27, 2007
Duggan articulately connects social and economic issues to each other, arguing that neoliberal politics have divided the two when in actuality, they cannot be separated from one another.
In the introduction, Duggan argues that politics have become neoliberal - while politics operate under the guise of promoting social change or social stability, in reality, she argues, politicians have failed to make the connection between economic and social/cultural issues. She uses historical background to prove the claim that economic and social issues can be separated from each other is false.
For example, she discusses neoliberal attempts to be "multicultural," but points out that economic resources are constantly redistributed upward. Neoliberal politics, she argues, has only reinforced and increased the divide between economic and social political issues.
After the introduction, Duggan focuses on a specific topic in each chapter: downsizing democracy, the incredible shrinking public, equality, and love and money. In the first chapter (downsizing democracy), she argues that through violent imperial assertion in the Middle East, budget cuts in social services, and disillusionments in political divides, "capitalists could actually bring down capitalism" (p. 2).
Because neoliberal politicians wish to save neoliberalism by reforming it, she argues that proposing alternate visions and ideas have been blocked. Duggan provides historical background that help the reader connect early nineteenth century U.S. legislation (regarding voting rights and slavery) to perpetuated institutional prejudices.
Jun 14, 2019 | www.nakedcapitalism.com
The right-wing libertarian gold-currency types hate the 2% target. They call the Fed "economic illiterates" for having a 2% inflationary target. After all, "why would anyone think it's a good thing to have prices go up on purpose?"
That is the end of their analysis.
But these boneheads completely miss the point: the 2% target isn't about an intentional effort to create inflation and make things constantly more expensive for people. It's instead about stability.
The 2% target came about almost by accident and fairly unintentionally when it was first set by New Zealand . So this isn't about an intentional effort by the diabolical (((Fed))) to make things more expensive for everyone, or to prevent inflation from becoming lower.
Before, the Fed would just say they want to "lower" inflation, or "increase" inflation without a real target other than to stave off run away inflation. You had chairman like Volker just let the interest rate rip in order to break the back of inflation in a reactionary way. What we ended up with were massive inflationary and deflationary swings and the Central Bankers became tired of it.
So instead of reacting to swings, they decided to just set the target at 2%, that way you are trying to hit the target rather than trying to react to economic indication of rising or lowering inflation.
This isn't all good news. Because when you see the 2% target for what it is, an artificial target that Central Bankers are hell-bent on hitting, you can see why the Fed is getting really anxious these days.
The Central Bankers have pulled out all the tricks out of the bag, QE, ZIRP, rock bottom interest, and even negative interest in Europe, and for a while in 2018 they pretty much hit their 2% target (at least in the US). And we were all styling. Home prices were growing in a stable way. Jobs numbers were great. Stock Market was high. The Trump tax cut scam pumped the economy up even further.
But then December 2018 hit. The sugar high from the Trump tax cut wore off. Wall Street took a 20% bear-market nose dive. Housing prices slowed growth and sales slowed. And now we are seeing manufacturing indexes, initial jobs reports showing things have slowed.
Now they can't keep it at the target and they aren't sure what to do about it. You don't cut interest rates in a strong economy (which is what we supposedly have), but at the same time Wall Street is screaming for further rate cuts. And when Wall Street threw its temper tantrum in December 2018, the Fed rewarded them with putting a stop to the three anticipated rate hikes this year.
If the current CPI stats are an indication of where things are going, it sounds like Wall Street had it right and the Fed had it wrong–the Fed wanted to increase interest rates, which would have had a deflationary effect. Wall Street wanted the cut to get an inflationary effect that helps the market. Wall Street won.
The problem is now that the pause in interest rates didn't have the inflationary effect Wall Street wanted (even though the Fed is still holding on to hope that deflation is "transitory") and so now they are demanding more cuts. At the same time the Fed is scratching its head saying it's "open" to more cuts, but showing some genuine misgivings about cutting rates when they were certain just 7 months ago that rate hikes were what the economy needed.
This is on top of a mixed bag of data suggesting the economy isn't really coming or going at this point, it's just frothy. What we are seeing is paralysis. he only thing left is more cuts. J-Rome knows it.
The other problem is that CPI is also largely a contrived number. It's based on funny math. Don't like the swings in the price of gas? Just take it out of the CPI! Don't like the price of food in there, take it out! Don't like the price of houses, take it out!
If you are trying to manage an economy by hitting an artificial inflationary target of 2% based on artificial inflationary data that doesn't give you the whole picture, an observer could see why you'd be a little confused when your decisions don't lead to your intended outcome.
The reality is for the vast majority of Americans, the price they pay at the pump has direct, immediate and visible impact on their bills, spending and outlook. The price of food does too, and so does the price of the roof over their head. People notice when the price of the big mac extra value meal shoots up a dollar. This is probably also why we have the cognitive dissonance of a "great" economy while people are buried in credit card debt, student loan debt and corporate debt and while a majority ( https://www.cnbc.com/2017/06/19/heres-how-many-americans-have-nothing-at-all-in-savings.html ) of Americans don't have $1,000 liquid money to tap in case of an emergency.
So if CPI is going lower, but CPI doesn't take into account the basic costs of living that are actually extremely volatile and not just smoothly going down, and the Fed is chasing a 2% CPI number that doesn't include these inflationary variables, the Fed could be targeting an inflationary target that is actually deflationary when all the gimmicky math is taken out of the equation.
Now we see why the fed is struggling, CPI is going down. Consumers are feeling the pain of higher prices none-the-less, along with stagnant wages and more debt. What the consumers are experience aren't being taken into consideration by the Fed because those numbers "don't count." You have the market demanding further cuts because the lower the interest rate, the more likely people are to dump their money into the market searching for some investment returns that at least are par with inflation that is probably a lot higher in reality for the average Joe than core CPI lets on.
Why bother saving when you get no return and you can't save anyway because your cost of living is out of control?
No wonder the Fed is being indecisive. They don't want to believe their lying eyes.Reply ↓
polecat , June 12, 2019 at 6:43 pm
They don't have eyes they have 'receptors' as in like, say .. a cockroach !
OpenThePodBayDoorsHAL , June 12, 2019 at 6:51 pm
Brother free your mind, you're just watching the shadows on the walls of Plato's cave.
Hint: "central" banks are not central at all so how could they have any real control over things like rates and inflation. Start at 18:45:
Jun 12, 2019 | peakoilbarrel.com
likbez, 06/11/2019 at 12:47 pmhttp://crookedtimber.org/2019/06/11/green-new-deals-and-natural-resources/GoneFishing, 06/11/2019 at 1:40 pm
My attention was caught yesterday by a press release from the UK's Natural History Museum, authored by a group of British geoscientists:
The letter explains that to meet UK electric car targets for 2050 we would need to produce just under two times the current total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world's lithium production and at least half of the world's copper production.
A friend alerted me to a piece by Asad Rehman of War on Want, provocatively entitled The 'green new deal' supported by Ocasio-Cortez and Corbyn is just a new form of colonialism which makes the point:
The demand for renewable energy and storage technologies will far exceed the reserves for cobalt, lithium and nickel. In the case of cobalt, of which 58 per cent is currently mined in the DR of Congo, it has helped fuel a conflict that has blighted the lives of millions, led to the contamination of air, water and soil, and left the mining area as one of the top 10 most polluted places in the world.
In a sense hybrid cars are more promising as they have much smaller battery and as such consume less rare elements per car.
It looks like the current stress on "pure" EV is really unhealthy and unscientific.You are right in your belief that people will not want to change their lifestyles, but they will, there will be no choice and soon they will mostly forgot how it was in the past.notanoilman, 06/11/2019 at 2:27 pm
2050 will be a very different world than the present, and 2080 will again be a very different world.
Specific societal projections into the future beyond about 10 years are pure fantasy and should be ignored. Some major physical changes are underway on this planet which will change everything. Those should not be ignored.1/ Cobalt is being dramatically reduced in batteries with the newest technology eliminating it altogether.Nick G, 06/11/2019 at 3:23 pm
2/ Rare earths, such as neodymium, are not needed for electric motors nor, for that matter, in wind turbines.
These shortage scare stories are fake facts pushed by the anti-renewables lobby.
https://forums.tesla.com/de_AT/forum/forums/no-rare-earth-metals-model-sYep -fake facts.OFM, 06/11/2019 at 3:39 pm
There's an enormous amount of lithium out there – far more than the proven reserves of the USGS, which were never, ever intended to be used for this kind of long-term planning exercise. But it doesn't really matter.
There are many, many different chemistries for making batteries. Lead, aluminum, sulfur, iron the list is almost as long as the periodic table. Lithium has a little higher energy density than most, but they'd all work, in a pinch.
For instance, there was a company recently developing an advanced lead battery that was at least twice as energy dense as convention lead-acid and half the cost, but it couldn't quite compete with the li-ion juggernaut, and it went out of business.
Think VHS vs Beta. Beta was better, but VHS was a bit cheaper and better marketed, and got to economies of scale before Beta. Both worked.
Think Laserdisc vs Blueray. Laserdisc was a bit larger, and it didn't quite compete with DVD and Blueray. But it worked just fine.The one really critical point that Tesla bashers are VERY careful to avoid is that Tesla's market cap at the lowest point a few days back was still roughly eighty percent of Ford's and not much less than that, about sixty five percent ( mental arithmetic in both cases) of GM . and that Tesla manufactures only a tiny percentage of the volume of these two old line companies. FOR NOW, lol.Nick G, 06/11/2019 at 8:48 pm
Folks who bought GM years ago haven't seen any stock price appreciation worth writing home about it. Ditto Ford.
Tesla even in the dumps is a big winner for long term investors.Investors buy growth, and Tesla has delivered the growth that it originally promised.islandboy, 06/11/2019 at 10:23 pm
Tesla will continue to grow until legacy car makers really get serious about EVs.
The latest commercials from Audi and Nissan suggest that they begin to really "get it", but they're still moving pretty slowly.Here's Proof That Electric Cars Are Displacing Gasoline
According to a recent report from the DOE's Office of Energy Efficiency & Renewable Energy (via Charged), plug-in vehicles displaced 323 million gallons of gasoline in the US in 2018. That's still a mere drop in the gas can: it amounts to 0.25% of all gasoline used in the US in that year (another dose of reality: the increasing popularity of trucks and SUVs has more than wiped out all the emissions reductions from EVs).
However, the trend of falling demand for gas is gathering speed. The amount of gasoline displaced was about 42% higher in 2018 than in 2017, and about double the amount in 2016. Furthermore, the share of pure electric vehicles is growing. Gasoline displacement from pure EVs versus plug-in hybrids was evenly split in 2012 and 2013, but in 2018, EVs accounted for two thirds of the displacement.
As gas consumption begins to fall, electricity consumption is rising. Another DOE report shows that the amount of energy consumed by plug-in vehicles in the US has nearly doubled in the last two years, from 1.44 terawatt hours in 2016 to 2.85 TWh in 2018. Here we also see the trend toward pure EVs – in 2018, pure EVs accounted for 61% of electricity consumption from plug-in vehicles, while plug-in hybrids accounted for 39%.
Jun 12, 2019 | finance.yahoo.com
A new poll from Democracy Fund Voter Study Group shows that President Trump could lose swing voters on economic issues, and the President responded in a tweet calling it "Fake Polling".
Jun 12, 2019 | finance.yahoo.com
Huawei Technologies Co Ltd has told Verizon Communications Inc that the U.S. carrier should pay licensing fees for more than 230 of the Chinese telecoms equipment maker's patents and in aggregate is seeking more than $1 billion, a person briefed on the matter said on Wednesday.
Verizon should pay to "solve the patent licensing issue," a Huawei intellectual property licensing executive wrote in February, the Wall Street Journal reported earlier. The patents cover network equipment for more than 20 of the company's vendors including major U.S. tech firms but those vendors would indemnify Verizon, the person said. Some of those firms have been approached directly by Huawei, the person said.
The patents in question range from core network equipment, wireline infrastructure to internet-of-things technology, the Journal reported. The licensing fees for the more than 230 patents sought is more than $1 billion, the person said.
Huawei has been battling the U.S. government for more than a year. National security experts worry that "back doors" in routers, switches and other Huawei equipment could allow China to spy on U.S. communications. Huawei has denied that it would help China spy.
Companies involved, including Verizon have notified the U.S. government and the dispute comes amid a growing feud between China and the United States. The licensing fee demand may be more about the geopolitical battle between China and the United States rather than a demand for patent fees.
Huawei and Verizon representatives met in New York last week to discuss some of the patents at issue and whether Verizon is using equipment from other companies that could infringe on Huawei patents.
Verizon spokesman Rich Young declined to comment "regarding this specific issue because it's a potential legal matter."
However, Young said, "These issues are larger than just Verizon. Given the broader geopolitical context, any issue involving Huawei has implications for our entire industry and also raise national and international concerns."
Huawei and U.S. wireless carriers T-Mobile US Inc and AT&T Inc did not respond to Reuters' requests for comment. Sprint Corp declined to comment.
The United States last month put Huawei on a blacklist that barred it from doing business with U.S. companies on security grounds without government approval, prompting some global tech firms to cut ties with the world's largest telecoms equipment maker.
Washington is also seeking the extradition of Huawei Chief Financial Executive Meng Wanzhou from Canada after her arrest in Vancouver last December on a U.S. warrant.
China has since upped the pressure on Canada, halting Canadian canola imports and in May suspended the permits of two major pork producers.
(Reporting by Arjun Panchadar in Bengaluru and David Shepardson in Washington; Editing by Anil D'Silva, Sriraj Kalluvila and Sandra Maler)
Jun 11, 2019 | crookedtimber.org
MisterMr 06.11.19 at 11:16 am@nastywoman 26
" -- seems to me a very complicated explanation for: If a country doesn't produce what it consumes Such a country is entirely F ed!"
This is totally NOT what I said, so I'll restate my point differently.
IF people (localists, sovereignists etc.) really wanted less globalisation, without global supply chains, etc., then it would be possible, at a price (in terms of productivity).
BUT in reality localists, sovereignists etc. don't really want de-globalisation for the sake of it, they mostly want to increase exports and decrease imports, and in fact these localists desires are stronger in countries (USA, UK) that are big net importers, and therefore think they are losing in the globalisation race.
The reason localists want to increase exports and decrease imports is that it is a form of mercantilism: if exports increase and imports decrease, there are more jobs and contemporaneously there are also more profits for businesses, so it's natural that countries want to import less and export more.
BUT exports are a zero sum game, so while this or that country can have some advantages by being a net exporter, this automatically means that some other country becomes a net importer, so onne can't solve the problem of unemployment by having everyone being net exporters (as Krugman once joked by having everyone export to Mars).
So the big plan of localists cannot work in aggregate, if it works for one country it creates a problem for another country. This is a really big problem that will cause increasing international tensions.
We are seeing this dinamic, IMHO, in the Brexit negotiations, where in my opinion many brexiters had mercantilist hopes, but of course the EU will not accept an accord that makes it easy for the UK to play mercantilist.
I'll add that I think that Brexiters don't really realise that they are mercantilists, but if you look at the demands and hopes of many Brexiters this is their "revealed preference".
This is also a problem because apparently many people (not only the Brexiters, see also EU's policies towards Greece) don't really realise what's the endgame for the policies they are rooting for, it seems more like a socially unconscious tendency, so it is difficult to have a rational argument with someone that doesn't really understand what he wants and what he is in practice trying to do.
The reason that every country is trying to play mercantilist is that in most countries inequality rose in the last decades, which creates a tendency towards underconsumption, that must be countered through one of these 3 channels: (1) Government deficits; (2) Easy money finance and increased levels of financial leverage; (3) net exports.
The first two channels lead to higher debt levels, the third apparently doesn't but, as on the other side of net exports there has to be a net importer, in reality it still relies on an increase in debt levels, only it is an increase in debt levels by someone else (sometimes known as the net exporter -- "vendor-financing" the net importer)
The increase in leverage goes hand in hand with an increase of the value of capital assets VS GDP, that is an increase of the wealth to income ratio.
So ultimately the increased level of inequality inside countries (as opposed to economic inequality between countries, that is falling) leads to a world where both debt levels and asset prices grow more than proportionally to GDP, hence speculative behaviour, and an economy that is addicted to the increase of debt levels, either at home or abroad (in the case of net exporting countries).
The countries that seriously want to become net exporters have to depress internal consumption, which makes the problem worse at a world level. The countries like the USA, where internal consumption is too much a big share of the pie relative to what the USA could gain by exports, are forced to the internal debt route, and so are more likely to become net importers.
However, in this situation where everyone acts mercantilist, by necessity someone will end up a net importer because import/export is a zero sum game, so it doesn't really make sense to blame this or that attitude of, for example, Americans for they being net importers: they are forced into it because otherwise they would be in perma-depression.
nastywoman 06.11.19 at 11:31 am ( 30 )“But it is unquestionably and unarguably true that American conflict (which may or may not be of a military nature) with a rising China is literally inevitable”Mike Furlan 06.11.19 at 2:30 pm ( 31 )
As long as the US Casino -(”the stock market”) will react unfavourable to a (real) American-Chinese conflict – there will be no (real) American-Chinese conflict –
(just the games which are going on currently) – and just never forget – all of my Chinese friends are really ”tough gamblers”.@30
“As long as the US Casino -(”the stock market”) will react unfavourable to a (real) American-Chinese conflict – there will be no (real) American-Chinese conflict “
Crash, then conflict?
One possibility is a US market crash entirely due to domestic shenanigans, followed by demagogue blaming it all on “Chiner.”
Jun 11, 2019 | www.moonofalabama.org
MG , Jun 11, 2019 8:40:24 AM | 129
You stated, "Let's also ignore the fact that the sons and grandsons of the unionised postwar generation for the most part subsequently rejected blue collar work no matter what the pay. This is a sign of decadence I will grant you, and I am guilty as charged. "
This canard doesn't hold up in the face of empirical evidence. One example: 20,000 waiting in line for lousy warehouse jobs at Amazon. The fact is, open borders and illegal immigration are NeoLiberal tactics to promote wage arbitrage. In California, those impacted the most by illegal immigration are African Americans. Whole sectors, such as hotel maintenance and janitorial service, had been unionized, and had principally employed black workers whose salaries enabled them to move into the middle class. The hotel industry welcomed the influx of illegal immigrants willing to work for drastically lower wages. Black workers were replaced and the union destroyed. Unfortunately, many in the US and globally have been so propagandized about illegal immigration that even mentioning illegal immigration gets one falsely labeled racist. in the US, Democrats use illegal immigration as a "demographic strategy," which enables Democrats to remain in power while remaining wholly loyal to Wall Street and doing nothing to ameliorate the misery of the bottom 90%.
Jun 10, 2019 | www.counterpunch.org
The Boeing-driven FAA is rushing to unground the notorious prone-to-stall Boeing 737 MAX (that killed 346 innocents in two crashes) before several official investigations are completed. Troubling revelations might keep these planes grounded worldwide.
The FAA has a clearly established pro-Boeing bias and will likely allow Boeing to unground the 737 MAX. We must demand that the two top FAA officials resign or recuse themselves from taking any more steps that might endanger the flying public. The two Boeing-indentured men are Acting FAA Administrator Daniel Elwell and Associate FAA Administrator for Aviation Safety Ali Bahrami.
Immediately after the crashes, Elwell resisted grounding and echoed Boeing claims that the Boeing 737 MAX was a safe plane despite the deadly crashes in Indonesia and Ethiopia.
Ali Bahrami is known for aggressively pushing the FAA through 2018 to further abdicate its regulatory duties by delegating more safety inspections to Boeing. Bahrami's actions benefit Boeing and are supported by the company's toadies in the Congress. Elwell and Bahrami have both acquired much experience by going through the well-known revolving door between the industry and the FAA. They are likely to leave the FAA once again for lucrative positions in the aerospace lobbying or business world. With such prospects, they do not have much 'skin in the game' for their pending decision.
The FAA has long been known for its non-regulatory, waiver-driven, de-regulatory traditions. It has a hard time saying NO to the aircraft manufacturers and the airlines. After the aircraft hijackings directing flights to Cuba in the 1960s and 1970s, the FAA let the airlines say NO to installing hardened cockpit doors and stronger latches in their planes. These security measures would have prevented the hijackers from invading the cockpits of the aircrafts on September 11, 2001. The airlines did not want to spend the $3000 per plane. Absent the 9/11 hijackings, George W. Bush and Dick Cheney might not have gone to war in Afghanistan.
The FAA's historic "tombstone" mentality (slowly reacting after the crashes) is well known. For example, in the 1990s the FAA had a delayed reaction to numerous fatal crashes caused by antiquated de-icing rules. The FAA was also slow to act on ground-proximity warning requirements for commuter airlines and flammability reduction rules for aircraft cabin materials.
That's the tradition that Elwell and Bahrami inherited and have worsened. They did not even wait for Boeing to deliver its reworked software before announcing in April that simulator training would not be necessary for the pilots. This judgment was contrary to the experience of seasoned pilots such as Captain Chesley "Sully" Sullenberger. Simulator training would delay ungrounding and cost the profitable airlines money.
Boeing has about 5,000 orders for the 737 MAX. It has delivered less than 400 to the world's airlines. From its CEO, Dennis Muilenburg to its swarms of Washington lobbyists, law firms, and public relations outfits, Boeing is used to getting its way. Its grip on Congress – where 300 members take campaign cash from Boeing – is legendary. Boeing pays little in federal and Washington state taxes. It fumbles contracts with NASA and the Department of Defense but remains the federal government's big vendor for lack of competitive alternatives in a highly concentrated industry.
Right now, the Boeing/FAA strategy is to make sure Elwell and his FAA quickly decide that the MAX is safe for takeoff by delaying or stonewalling Congressional and other investigations.
The compliant Senate Committee on Commerce, Science and Transportation, under Senator Roger Wicker (R-MS), strangely has not scheduled anymore hearings. The Senate confirmation of Stephen Dickson to replace acting chief Elwell is also on a slow track. A new boss at the FAA might wish to take some time to review the whole process.
Time is not on the side of the 737 MAX 8. A comprehensive review of the 737 MAX's problems is a non-starter for Boeing. Boeing's flawed software and instructions that have kept pilots and airlines in the dark have already been exposed. New whistleblowers and more revelations will emerge. More time may also result in the Justice Department's operating grand jury issuing some indictments. More time would let the House Transportation and Infrastructure Committee, led by Chairman Peter DeFazio (D-OR) dig into the failure of accountability and serial criminal negligence of Boeing and its FAA accomplices. Chairman DeFazio knows the history of the FAA's regulatory capture.
Not surprising on June 4, 2019, DeFazio sent a stinging letter to FAA's Elwell and his corporatist superior, Secretary of Transportation Elaine L. Chao, about the FAA's intolerable delays in sending requested documents to the Committee. DeFazio's letter says: "To say we are disappointed and a bit bewildered at the ongoing delays to appropriately respond to our records requests would be an understatement."
The FAA and its Boeing pals are using the "trade secret" claims to censor records sought by the House Committee. When it comes to investigating life or death airline hazards and crashes, Congress is capable of handling so-called trade secrets. This is all the more reason why the terminally prejudiced Elwell and Bahrami should step aside and let their successors take a fresh look at the Boeing investigations. That effort would include opening up the certification process for the entire Boeing MAX as a "new plane."
The Boeing-biased Elwell and Bahrami have refused to even raise in public proceedings the question: "After eight or more Boeing 737 iterations, at what point does the Boeing MAX 8 become a new plane?" Many, including Cong. David Price (D-NC), chair of the House Appropriations Subcommittee, which oversees the FAA's budget, have already questioned the limited certification process.
Heavier engines on the old 737 fuselage changed the MAX's aerodynamics and made it prone-to-stall. It is time for the FAA's leadership to change before the 737 MAX flies with vulnerable, glitch-prone software "fixes".
Notwithstanding the previous Boeing 737 series' record of safety in the U.S. during the past decade – (one fatality), Boeing's bosses, have now disregarded warnings by its own engineers. Boeing executives do not get one, two, three or anymore crashes attributed to their ignoring long-known aerodynamic engineering practices.
The Boeing 737 MAX must never be allowed to fly again, given the structural design defects built deeply into its system.
Jun 10, 2019 | finance.yahoo.com
The U.S. tariffs on Mexico might be off, but Citigroup Inc. strategists warn that trade tensions are set to climb, roiling financial markets from stocks and bonds to commodities.
"Tensions are mounting and the outcome looks more likely to be driven by politics than economics," Citigroup's Global Macro strategy team, led by Mark Schofield, wrote in a June 10 note to clients. President Donald Trump "is likely to continue to take a hard line."
Citigroup's base case sees Trump applying 25% tariffs on the remaining Chinese goods not yet hit -- a "shock and awe" strategy in the run-up to a handshake deal -- along with duties on automobile imports and increased tensions with Europe and Japan. If the Federal Reserve doesn't cut interest rates, this scenario leaves markets on course for the following: A "full scale bear market" in the S&P 500 Index, sending it 20% down from its April peak, to 2,350A tumble in 10-year Treasury yields to 1.50% and "maybe lower"A surge in gold prices to $1,600 an ounce, a level unseen since 2013
The good news is that the landscape "may be transitioning" to a different scenario, with no trade deal forthcoming with China, but the Fed providing 75 basis points worth of rate cuts. That would see new highs on the S&P 500, with 10-year yields as high as 2%. Gold would still gain thanks to a cheaper dollar, with a $1,500 target, the Citigroup team wrote.
A third scenario has a trade deal at the Group of 20 summit at the end of this month in Japan, where Trump may meet with Chinese President Xi Jinping. Equities would surge, with emerging markets "significantly outperforming." Yields would rise while gold would slip along with the dollar.
To contact the reporter on this story: Eric Lam in Hong Kong at email@example.com
To contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Joanna Ossinger
Jun 10, 2019 | turcopolier.typepad.com
Timothy Hagios , 09 June 2019 at 01:49 PMOn the bright side, if ever there were a candidate who might be inclined to rethink our relationship with the Saudis, it's Buttigieg.
Oh, who am I kidding? He would be given a lavish reception in Riyadh, where he would deliver a speech thanking our Saudi allies for leading the brave fight against "Iranian homophobia."
Jun 10, 2019 | www.zerohedge.com
Bam_Man , 3 hours ago linkGreenspazm , 1 hour ago link
One year ago, EVERYBODY was a bond "bear", predicting a long string of rate hikes that would bring Fed Funds up to 4.50%.
They were ALL wrong. VERY wrong.
They are probably just as wrong now that they are bond "bulls".Bam_Man , 1 hour ago link
No, if you use kimble charting technical analysis you will get very rich.
Jun 10, 2019 | peakoilbarrel.com
Boomer II says: 06/08/2019 at 1:07 amThe Wall Street Journal today has an article about how sources of funding have dried up for frackers.ProPoly says: 06/08/2019 at 11:32 am
I'm not sure substitution will kill oil prices. And while I know peak oil will happen, putting a date on it doesn't much matter to me.
What most interests me is when investors, lenders, and execs at oil companies decide having their money tied up in petroleum just doesn't make financial sense and it is time to bail.LTO is going to have to slow down with low prices and less access to capital. North Dakota drilling in at least the past 8 months is going to lose money. Getting mid-$40s at best and in December much worse in the initial flow burst is no bueno. Even if hedged, it's still an overall economic loser with operators having no positive free cash flow.Lightsout says: 06/08/2019 at 1:54 am
Cash for additional drilling *has* to come from investors or lenders. That gets choked off, theres no money to pay the up front capital and labor costs of new wells."Well, we're never going to see WTI over $60 again"Freddy says: 06/08/2019 at 7:11 am
I think that one is going to bite your ass.According to Mark Papa in Q4 2018 presentation EOG did not see any possibility to increase oil production as they need 75 usd / bbl WTI. They priority to pay depth , interest and dividend to their investors.GuyM says: 06/08/2019 at 8:13 am
If the vreak even price WTI average shale oil is 65 usd today , I doubt this will be reduced the next 3-5 years as the rock formation will have reduced production Quality, the max. latitude lenght and number each drill pad might be reach, now I read gaz is injected to stimulat production the impact of this remain to see.
Higher labour cost , increase cost of funding as oil & Gaz is already less popular because of environmental issues. Than there is some increase offshore activity, and onshore drilling in Europe.
But even the oil majours want cheeper wells and service work it will not be any cheaper because all need profit to grow a healthy Buisiness. In the mean time about 15% of the oil produced are replaced adding 6-7% decline rate to that and at least 1% growth in demand even with trade war it seems clear the world need significant more oil that is profittable to develop to a cost consumers around the globe , mostely poor in development Country can afford to buy and during time there need to be less energy made from fosil fuel.I saved the Rystad article that has US at 12.5 now, and 13.4 by the end of the year. I will revisit it from time to time. It's classic BS to the point of being really funny. Like "Little shop of Horrors" (the original, not the 1986 remake) the really bad SF movie.Ron Patterson says: 06/08/2019 at 11:24 am
I mean, really. We were at 11.9 the end of March per EIA monthlies. With no substantial increase in completions and drops in active rigs, we have increased 600k in two months??? Then in the last half of 2019, we are going to increase another 900k per day, when prices are less than $55 now? Well, if your going to lie, tell a big one. My Venus flytrap ate my homework :-)Dennis, from your reply to Freddy:Ron Patterson says: 06/08/2019 at 12:07 pm
In 2018 World C+C average output was about 82.84 Mb/d, so my "best guess" (which could indeed be incorrect) scenario sees an increase of 4.46 Mb/d from 2018 to 2026.
Okay, that ain't all that unreasonable except except you have C+C production in 2019 increasing by 1,449 over the average of 2018. February 2019 World C+C production was 82,389,000 barrels per day. Your 2019 average is 1,901,000 barrels per day above that figure. Dennis, that just ain't gonna happen.
The below chart is through April 2019.Peak Beer says: 06/08/2019 at 4:05 pm
OPEC + Russia + Canada accounts for 55% of the World's oil production. These 14 OPEC nations plus Canada plus Russia averaged 47,849,000 barrels per day in 2018. Their average for the first four months of 2019 was exactly 46,000,000 barrels per day or 1,848,000 barrels per day below their 2018 average. Their April output was 2,352,000 barrels per day below their 2019 average.
If World C+C is higher in 2019 than in 2018, who will make up this huge difference. US Shale?
Scary Chart!Greenbub says: 06/08/2019 at 6:33 pm
Canada still has lots of potential, their tars sands are just declining because of low oil prices.
I believe that the Aberta Tar Sands are pretty much "guaranteed" (much less risk compared to drilling for nothing) as long as the price is right. They are definitely there.
I am sure that statement will be destroyed by oil professionals (which I am not). But RockMtnGuy from Oil Drum who used to work on them I think, said pretty much the same thing.
thanks for your work Ron.Isn't the answer the difference will be made up by drawing from storage until the price gets high enough to bring more production on? $120 barrel is going to get offshore fired back up and maybe even Venezuela.Ron Patterson says: 06/08/2019 at 9:10 pmNo, there is just not that much storage. A nation can draw from storage for only a couple of months until they run out of storage. That is unless they have a tremendous amount of storage. Not many nations have that much storage. 120$ a barrel? You're dreaming. Perhaps in a decade or so.Alice Friedemann says: 06/08/2019 at 2:06 pmWhat role do the giant oil fields play? As I write in my book "When trucks stop running:Ron Patterson says: 06/08/2019 at 3:18 pm
the average size of new oil ﬁelds has declined, leaving us heavily dependent on the original giant oil ﬁelds discovered many decades ago.
Of the roughly 47,500 oil ﬁelds in the world, 507 of them, about one percent, are giant oil ﬁelds holding nearly two-thirds of all the oil that has ever been, or ever will be produced, with the largest 100 giants, the "elephants," providing nearly half of all oil today
Since giant oil ﬁelds dominate oil production, the rate they decline at is a good predictor of future world oil production. In 2005, they provided 60 % of world oil. Giant ﬁelds only begin to decline after a long plateau phase where production ﬂuctuates within a 4 % range. In 2007, the 261 giants past their plateau phase were declining at an average rate of 6 % a year. Their decline rate will continue to increase by 0.15 % a year, to 6.15, 6.3, 6.45 % and so on. By 2030 these giants, and the other giants joining them as time goes on, will be declining at an average rate of over 9 % a year
Since nongiant oil ﬁelds decline at much higher rates, especially offshore and tight oil, by 2030, the average decline rate of all oil ﬁelds past their peak production will be higher than 9 percent.
by 2030, from half to two-thirds of global crude oil production will need to be replaced -- 40 to 50 Mb/d of today's 77.8 Mb/d
Making up this shortfall will be difﬁcult, since four out of ﬁve barrels now come from ﬁelds found before 1973 and the majority of them are declining.
So far, Enhanced oil recovery in giant fields has increased the decline rate after peak production, because oil extracted now is unavailable after the peak, making the decline rate steeper. For example, Cantarell in Mexico, the second largest oil ﬁeld ever found, declined at 20 % rates due to the EOR used to increase the maximum rate of production
Aleklett, K., et al. 2012. Peeking at peak oil. Berlin: Springer.
Hook, M., et al. 2009. Giant oil ﬁeld decline rates and their inﬂuence on world oil production. Energy Policy 37(6):2262–2272.
Murphy, D.J., et al. 2011. Energy return on investment, peak oil, and the end of economic growth. Annals of the New York Academy of Sciences 1219: 52–72.Thanks Alice, that was very informative. That is why I believe the decline curve will be much steeper than the ascension curve. Individual fields, of course, reach their peak production in only a few years and their decline could take many years. But I am speaking of all the world's production combined. I think the decline curve will shock most people.robert wilson says: 06/08/2019 at 3:31 pmI once made a large poster about this 1978 Rand study. Had become interested in resource studies years earlier and occasionally lectured at ZPG and elsewhere. https://www.rand.org/pubs/reports/R2284.htmlGuyM says: 06/08/2019 at 5:43 pmThat's very informative, Alice. Very rough estimation from that, is that if shale were able to eke out another 600k increase a year, for a year or two, it could not possibly keep up with current decline rates in the bigger fields. Especially, when that shale increase is not going to start in 2019. World will be down, and add on another year of decline. 2018 will be looking more like peak year.Watcher says: 06/08/2019 at 11:06 pm
This poster has been considering post peak for, obviously, years. Kudos, this stuff is good!
http://energyskeptic.com/First of all, oil field geography (not geology) can be changed. So that can be one source of corruption in whatever number you want to quote for field production.Baggen says: 06/09/2019 at 6:32 am
Second of all, choke management can also corrupt whatever number you want to quote for field production.
And how about third of all you can change the definition of oil and call all sorts of liquids coming up the well bore "oil" regardless of API density and corrupt whatever number you want to quote for field production. Executives are paid for production, agencies collect taxes for production, royalty recipients are paid regardless of profit, so who is it that would oppose manufacturing any number for production you want to quote? Lenders? The Fed is providing nearly 0% interest rates. Why would lenders care? Maybe refineries would care, but you can probably cut them in.
So you can pretty much put numbers and conclusions about flow to bed.Alice,Alice Friedemann says: 06/09/2019 at 7:06 pm
Excellent post, i tried in a previous thread to argue a bit for this case but i could not put word or numbers on it like you did.
I agree with Ron i think future global decline rates will come as a rude awakening.Dennis and others,Hickory says: 06/09/2019 at 11:27 pm
Thanks for educating me further.
I do think that geological depletion isn't the only factor that could knock it up to 6%.
Very little oil has been explored for and found in the past 5 years, plus add on another 10 years to develop what's discovered
As the contribution declines from the Giants more will have to be provided by the other 50,000 fields that have much higher decline rates. Onshore may be 3.5%, but a lot of new oil is offshore with a much higher decline rate, perhaps higher than it needs to be. I've heard that oil is left offshore due to the haste in building these rigs to pay investors off as quickly as possible.
Since diesel is all that matters in keeping civilization alive, and U.S. shale oil is only good for plastics, we depend on heavy oil producers like venezuela, mexico, Iran, and canadian tar sands which are all problematic
I'm not so sure there are a lot of good places to drill. A quarter of remaining oil is in the arctic and can't be obtained because of ice bergs, nor is it likely fields will be developed on land in Alaska due to the challenges of permafrost.
A financial crash stops or slows much of the exploration and production. Potentially for a long time, since unlike in the Great Depression, we won't have fossils to recover with as we did back then.
Oil is a global commodity today, but will it be when production declines? If not, that will accelerate the decline rate for nation's that can't get oil (i.e. the export land model of Jeffrey Brown).
Though we'll be just fine, I'm sure most nations will be keen to send us diesel in exchange for U.S. fracked plastic."Since diesel is all that matters in keeping civilization alive, and U.S. shale oil is only good for plastics,"Niko McManus says: 06/09/2019 at 11:43 pm
I had missed this point in earlier discussions. Can others here confirm that LTO is not suitable for diesel production?This is only true to an extent. Because refineries we're designed over the years to process heavier oils than LTO the ones that exist have trouble handling all the light stuff. And the light stuff has less of the distillates needed for diesel. However, they don't produce no diesel at all, and refineries can be modified/upgraded to produce diesel from pretty much whatever oil you want, for a cost.Jeff says: 06/10/2019 at 12:55 amWhat products you get out from the refinery is a function of both what oil you put into it and what refinery you have. There is some diesel in LTO but not as high as conventional oil. Getting a higher share diesel requires a complex refinery (and is costly). It currently makes more sense for refineries to blend with medium and heavy oil.Ron Patterson says: 06/10/2019 at 7:30 am
Oil demand has over time shifted to higher API oil. LTO is too high but perhaps not that bad. I think the main issue is that supply of LTO has increased very fast and demand was not as responsive due to lack of investments in US refineries and export capacity.In addition to what Jeff said, LTO is just that Light Tight Oil. Light implies short polymers. Gasoline has (ideally) 8 carbon atoms, kerosene 12 to 15 and diesel 16, or mostly around 16. So you can see that in very light oil, only a tiny fraction would have polymers that long.
In petroleum molecules, the carbon atoms are all in a string. That's why they call them polymer strings.
Jun 10, 2019 | crookedtimber.org
Lupita 06.09.19 at 6:02 pmThe first explicit reaction against globalization to gain popular attention was the Battle of Seattle in 1999
Why not the Zapatista uprising in 1994? It was explicitly against Nafta and neoliberalism. The 1997 Asian financial crisis also triggered a very strong reaction against the US centered globalized financial system, its hedge funds, and the IMF.
the neoliberal ideology on which it rested, didn't face any serious challenge until the Global Financial Crisis of 2008
In 2003, the unified challenge of the poorer countries was so serious that it the collapsed the WTO talks to the point that it has never recovered. 2008 was simply catastrophic.
More than globalization being challenged, I think it is US hegemony. Trump is definitely uniting its challengers with his media circus in Venezuela, disruptive tariff threats against Mexico, and the blacklisting of Huawei.
Likbez 06.09.19 at 11:38 pm (no link)
Trump election in 2016 was in essence a rejection of neoliberal globalization by the American electorate which showed the USA neoliberal establishment the middle finger. That's probably why Russiagate hysteria was launched to create a smoke screen and patch the cracks.
The same is probably true about Brexit. That's also explains Great Britain prominent role in pushing anti-Russia hysteria.
I think the collapse of neoliberal ideology in 2008 (along with the collapse of financial markets) mortally wounded "classic" neoliberal globalization. That's why we see the conversion of classic neoliberalism into Trump's "national neoliberalism" which rejects "classic" neoliberal globalization based on multinational treaties like WTO.
As the result of crisis of neoliberal ideology we see re-emergence of far-right on the political scene. We might also see the emergence of hostile to each other trading blocks (China Russia Turkey Iran; possibly plus Brazil and India ) vs G7. History repeats
I suspect that the USA neoliberal elite (financial oligarchy and MIC) views the current trade war with China as the key chance to revitalize Cold War schemes and strategically organize US economic, foreign and security policies around them. It looks like this strategic arrangement is very similar to the suppression of the USSR economic development during the Cold War.
The tragedy is that Trump administration is launching the conflict with China, while simultaneously antagonizing Russia, attacking EU and undermining elements of the postwar world order which propelled the USA to its current hegemonic position.
Jun 07, 2019 | www.nakedcapitalism.com
By Chris Dillow, an economics writer at Investors Chronicle. He blogs at Stumbling and Mumbling, and is the author of New Labour and the End of Politics. Follow him on Twitter: @CJFDillow. Originally published at Stumbling and Mumbling ; cross posted from Evonomics
I welcome Professor Sir Angus Deaton's report into inequality . I especially like its emphasis (pdf) upon the causes of inequality:
To understand whether inequality is a problem, we need to understand the sources of inequality, views of what is fair and the implications of inequality as well as the levels of inequality. Are present levels of inequalities due to well-deserved rewards or to unfair bargaining power, regulatory failure or political capture?
I fear, however, that there might be something missing here – the impact that inequality has upon economic performance.
My chart shows the point. It shows the 20-year annualized rate of growth in GDP per worker-hour. It's clear that this was much stronger during the relatively egalitarian period from 1945 to the mid-70s than it was before or since, when inequality was higher.
This might, of course, be coincidence: maybe WWII caused both a backlog of investment and innovation which allowed a subsequent growth spurt and a desire for greater equality.
Or it might not. This is not the only evidence for the possibility that inequality is bad for growth. Roland Benabou gave the example (pdf) of how egalitarian South Korea has done much better than the unequal Philippines. And IMF researchers have found (pdf) a "strong negative relation" between inequality and the rate and duration of subsequent growth spells across 153 countries between 1960 and 2010.
Correlations, of course, are only suggestive. They pose the question: what is the mechanism whereby inequality might reduce growth? Here are eight possibilities:
1. Inequality encourages the rich to invest not innovation but in what Sam Bowles calls " guard labour" (pdf) – means of entrenching their privilege and power. This might involve restrictive copyright laws, ways of overseeing and controlling workers, or the corporate rent-seeking and lobbying that has led to what Brink Lindsey and Steven Teles call the " captured economy. " An especially costly form of this rent-seeking was banks' lobbying for a "too big to fail" subsidy . This encouraged over-expansion of the banking system and the subsequent crisis, which has had a massively adverse effect upon economic growth .
2. Unequal corporate hierarchies – what Jeffrey Nielsen calls rank-based organizations – can demotivate junior employees. One study of Italian football teams, for example, has found that "high pay dispersion has a detrimental impact on team performance." That's consistent with a study of Bundesliga and NBA teams by Benno Torgler and colleagues which found that "positional concerns and envy reduce individual performance."
3. "Economic inequality leads to less trust" say (pdf) Eric Uslaner and Mitchell Brown. And we've good evidence that less trust means less growth . One reason for this is simply that if people don't trust each other they'll not enter into transactions where there's a risk of them being ripped off.
4. Inequality can prevent productivity-enhancing changes, as Sam Bowles has described . We have good evidence that coops can be more efficient than hierarchical ones, but the spread of them is prevented by credit constraints. Poverty reduces education levels by making it impossible to afford books, or encouraging bright but poor students to leave earlier than they should, and women and BAME people might avoid careers for which they are otherwise well-suited because of a lack of role modelss
5. Inequality can cause the rich to be fearful of future redistribution or nationalization, which will make them loath to invest. National Grid is belly-aching, maybe rightly, that Labour's plan to nationalize it will delay investment . But it should instead ask: why is Labour proposing such a thing, and why is it popular ?
6. Inequalities of power – in the sense of workers' voices being less heard than they were in the post-war period and trades unions becoming less powerful – have allowed governments to abandon the aim of truly full employment and given firms more ability to boost profits by suppressing wages and conditions. That has disincentivized investments in labour-saving technologies.
7. The high-powered incentives that generate inequality within companies can backfire . As Benabou and Tirole have shown (pdf) , they encourage bosses to hit measured targets and neglect less measurable things that are nevertheless important for a firm's success such as a healthy corporate culture. Or they might crowd out intrinsic motivations such as professional ethics. Big bank bonuses, for example, encouraged mis-selling and rigging markets rather than productive activities.
8. High management pay can entrench what Joel Mokyr calls the "forces of conservatism" which are antagonistic to technical progress. Reaping the full benefits of new technologies often requires organizational change. But why bother investing in this if you are doing very nicely thanks to the increased (pdf) market power of your firm? And if you have, or hope to have, a big salary from a corporate bureaucracy why should you set up a new company?
My point here is that what matters is not so much the level of inequality as the effect it has. And it might well be a pernicious one. If inequality has contributed to weaker growth, then it is very likely to have contributed to the rise of populism and to Brexit and the divisions with which both are associated. In this way, inequality does political damage too.
From this perspective, pointing out that the Gini coefficient has been flat for years (which is true if we ignore housing costs) is like saying that because the bus has stopped moving we need not care about the man who has been run over by it. It misses the main point.
Ignacio , June 7, 2019 at 5:18 am
Very good analysis on the consequences of inequality. I miss a conclusive one: disengagement . It is, in part, an objective of the wealthy because it discourages political participation of the masses. It is also root of populist movements. But maybe the most critical consequence of disengagement now is the difficulty to implement social changes badly needed to fight climate change.
rd , June 7, 2019 at 9:43 am
The re-engagement is often in a revolutionary cause.
Nelson Lowhim , June 7, 2019 at 6:49 am
Big one is health goes down for everyone. Sooner or later we all hurt
Jesper , June 7, 2019 at 8:10 am
Who/what wins when reason encounters power?
The reason why there is inequality is because that is what people in power want. So while there are many reasons why inequality is a problem to be resolved I believe that the only way to deal with it is to use power. The power of the ballot at the election. Voting for people with history of serving other interests than the electorate and then trying to reason with them to get them to change their mind is a bad idea.
Is there anyone who believes that the powers that be will change simply by presenting logical arguments to them?
The healthcare situation in the US is the best example. There are few, if any, logical arguments to have a healthcare system as the US has. Is there really anything to do but to elect people who will change it? Or is there a possibility to change the minds of the politicians who maintains it?
Mark Anderlik , June 7, 2019 at 11:10 am
There is more to do than just elect the "right" people to office, which is important. As we painfully know, elected leaders have a rather sorry record of making change, so simple reliance on the ballot is inadequate. We need resilience, mutual aid and organizational support in the polis, independent of the political class. This in order to not only elect good leaders, but also to hold them accountable from day one. To create such requires the long work of organizing. Organizing is not just advocacy (lobbying, e.g.) nor just mobilizing (mass demos, e.g.), it is about changing lives. When done properly, organizing changes politics and its possibilities in fundamental ways. But when done right, it is literally one person at a time over time. No quick fixes, no easy solutions. Are we up to this or not? That is the question facing us all.
Jim A. , June 7, 2019 at 8:33 am
High levels of inequality lead to the economy being demand-limited rather than capital-limited. Now either one can choke off economic growth, but monetary stimulus is more sustainable when it operates on the latter than the former. Buliding a new factory and employing more people in it is hopefully* going to be better for the economy in the long term than loaning cash strapped people money to be paid back with interest.
*But not always, look at all that dark fiber installed during the dot com boom.
rd , June 7, 2019 at 10:38 am
We are paying off our existing debt we built up while raising kids. It doesn't matter how much cheap debt Mr. Powell and Mr. Dimon want to throw at us, we aren't going to use it and will continue paying off the old debt. the bank calculators tell us we could take on hundreds of thousands of debt to buy a bigger house, fancy cars etc. but that is not happening. One of the key reasons is that we look at the political uncertainty and know that ultimately the best defense is low debt levels and well-diversified savings.
The high student debt levels many people have taken on means they are not taking on much new debt. so they used the debt to pay the universities but that is probably not as productive for the economy as buying condos, houses, cars, etc.
Many other people have been taking on debt because they don't make enough to cover their ongoing expenses. In a recession, that debt is likely to be high risk.
Corporations have been issuing lots of covenant-light junk bonds because Mr. Bernanke and Powell have provided inexpensive money. Many of those will likely go south in a recession creating a bigger issue. Unlike the dark fiber, most of that has not been for long-term capital projects so is unlikely to provide that economic stimulus in the future.
Jim A. , June 7, 2019 at 12:23 pm
And a big part of the reason debt levels are so high is because the wealthy have much more money to lend than they can find productive uses for. High debt levels are the direct result and evidence of a greater concentration of wealth than is optimal.
rd , June 7, 2019 at 10:01 am
Here is a good analysis of income distribution from 1913 to 2012. https://eml.berkeley.edu//~saez/saez-UStopincomes-2012.pdf
It is pretty clear that the period of low income inequality from WW II to the early 80s coincided with the giant productivity bump. So when Trump says "Make America Great Again" which I have assumed relates to that post-WW II boom, is he calling for reduced inequality and better sharing of wealth across the society? Or does he assume that the policies that lead to reduced productivity growth are what make America great?
While the stats aren't strong, my understanding is that the Gilded Age of the 1870s was another classic period of concentrated wealth that then started a period of frequent depressions from the 1880s to WW II, including the Panic of 1908 and the Great Depression. The Great Depression was preceded by a brief period of high inequality in the Roaring 20s that was not erased until after the 1937 stock market drop and the beginning of WW II.
I think the most interesting thing about inequality is how much distortion a short period of it can put into a society. It appears that it takes 2-3 decades for society to fully recover from each decade of high inequality. This is similar to the relative rates of stock market recovery compared to a stock market drop.
My primary hope is that we can come out of this period of inequality without a major global conflict. I suspect that the retiring of the baby boomers and the stress that puts on the system will lead to the realization of many retirees that they are on the menu instead of picking from the menu. That will likely begin to change their voting patterns in the coming decade coinciding with the growing political clout of the millenials.
shinola , June 7, 2019 at 11:28 am
Point #6 has me confused (that's not so difficult to do). The section ends with this sentence:
"That has disincentivized investments in labour-saving technologies."
Huh? I've been under the impression that not only labor-saving but labor-eliminating tech. is a very big deal. A big selling point for automation is that by eliminating jobs & job-related expenses it more than pays for itself.
Ignacio , June 7, 2019 at 12:15 pm
You point to the interesting debate on technology and jobs. IMO labour-saving techs mostly shift jobs. Whether it destroys more or less than those created is open to many informed and uninformed discussions. It almost certainly ends in higher productivity, but what about inequality? For some time technology raised all boats but lately not. I would argue that technology itself is not the evil. Erik Brynjolfsson signalled the "winner take all" dynamics of Silicon Valley as an example on how technology drives inequality nowadays.
Jim A. , June 7, 2019 at 12:31 pm
The big question is what happens to those doing the jobs that are left? If they share in the benefits of productivity growth through higher wages, they can buy more of OTHER products and services which creates demand and provides employment for those creating those products. But If they do not get higher wages, those displaced are competing for jobs with other displaced workers and depressing wages. The economy simply works better, with fewer speculative bubbles and more economic security for the vast majority when productivity gains are linked to rising pay, as they were in the post-war period. How to achieve this is a non-trivial question, but increasing the minimum wage and capital gains taxes are a start.
rd , June 7, 2019 at 1:02 pm
Some of the jobs have been automated. However, many have gone overseas to cheaper labor. Instead of keeping the jobs in country and using automation to reduce the labor cost and increase productivity, they just shipped everything off. In some cases where they kept the work in country, they simply moved the jobs to non-union states where the workers would work for much less.
If all you are concerned about is earnings per share, it doesn't really matter where or how the work gets done as long as you reduced the cost per unit revenue.
Simeon Hope , June 7, 2019 at 11:48 am
Someone, please remind me why we all need more growth in our economy. So far as I was aware, it was capitalism's need for constant growth that was a major cause of climate change. Whilst inequality has dreadful effects in other ways, surely lowering overall growth might be a good thing for the natural world. Infinite growth on a finite planet can go on only so long without serious consequences – or so it seems. The much-vaunted and much-hated Green New Deal takes as given that there is such a thing as green growth. Is there?
Nov 27, 2015 | economistsview.typepad.comOn student loans: Student Debt in America: Lend With a Smile, Collect With a Fist : ... Borrowing is risky, financial decisions are not always rational, and people often do a poor job of properly weighing the interests of their present and future selves.
The private enterprise system is built to limit overborrowing by sharing risk between lenders and borrowers. ... They charge more interest when they take on more risk. Because most loans can be discharged in bankruptcy, lenders share the cost of default. ...
But the federal student loan program doesn't work that way. Those ads that run on bus stop signs and on late-night television - "No Cash? No Credit? No Problem!" - are essentially the Department of Education's official policy on student loans.
On the front end, the department is the world's nicest, most accommodating lender. Interest rates ... are lower than banks charge... Borrowing for college is essentially an entitlement...
When the loan bill finally comes due, the federal government transforms into a heartless loan collector. You don't need burly men with brass knuckles to enforce debts when you have the Internal Revenue Service..., which can and will follow you as long as you live.
The government acts this way because the federal student loan program has been removed from the norms and values of prudent lending. Because the Department of Education doesn't consider risk, it takes no responsibility. If life, luck and bad choices leave you ... in the hole, it's all on you. ...
Most college students ... pay back their loans and enjoy the fruits of their degrees. But most pack-a-day smokers don't die of lung cancer. And most people who bought cars with Takata airbags from 2002 to 2008 weren't killed by shrapnel from explosions. Nevertheless, we still regard small risks of catastrophic outcomes as problems to be solved. ...
Just one quick comment. We need to solve the student loan problem for existing loans, but I wish talk about how to address this problem going forward was more about how to provide adequate funding for colleges so that large loans aren't needed in the first place rather than focusing on how to change the loan program itself.
Posted by Mark Thoma on Friday, November 27, 2015 at 11:28 AM in Economics , Education , Universities | Permalink Comments (10)likbez
=== quote ===
@run75441 -> Sanjait...
The cost containment of colleges is the same as what is needed for healthcare. The government should intervene since it is the principal financier in more ways than one.
=== end of quote ===
Very true. May be even the idea of the net of eligible providers (in network vs out of network) can be borrowed form healthcare.
As this is a public good, it should be severe punishment including jail terms for inflating the cost of education. For example I think Mankiw should be at investigated using RICO act for the cost of his textbook. But I think that students who enroll into Mankiw class are already second rate students because at this point they should do some research about who Mankiw really is and avoid his classes like a plague.
Still this is a clear and provable case of racket. Academic racket but still a racket.
But even minor prosecution of those academic rentiers is impossible under neoliberalism as regulators are captured and corrupted.
And students mostly are too badly informed and too naïve to shop around and find a better price. Which is still possible. For example using community college for the first two years and then transferring credits to a state university. And if student is talented enough he always can get masters at Ivy League school later and it will cost less.
Please note that quality of university education is already very problematic. Switching to preparing "ready for jobmarket" graduates backfired. I would say that quality now is dismal as student lacks fundamentals. They are now kind of "bug of tricks" degree holders.
So the idea of cost control of college education can't be refuted with the hypothesis that it will lower the quality of education. Essentially what Ivy league college degree buys is the first place in a heap of resumes to major companies (some companies simply discard resumes from applicant who do not have Ivy League education).
Now about subsidies. Neoliberal colleges are for profit business with academic sharks no different that sharks in chemical or pharmaceutical companies. They do not care about education, only about lining this own pockets. As simple as that.
That means that in a current environment any "broad" subsidies will result in raising of the cost of education. I would make subsidies more focused, subject to means test as well as passing a qualifying exam similar to GED. After all at this point the society invests some money into student.
so is he saying that we shouldn't give student loans unless a bank would loan the money
that's means many people who can now afford college wont be able to
and this:Dan Berg
"Most college students don't end up like Ms. Kelley. They pay back their loans and enjoy the fruits of their degrees. But most pack-a-day smokers don't die of lung cancer. And most people who bought cars with Takata airbags from 2002 to 2008 weren't killed by shrapnel from explosions. Nevertheless, we still regard small risks of catastrophic outcomes as problems to be solved."
is he kidding me??? My student loans required an 8% insurance policy, money I didn't even get to use, came out before I could pay tuition room and board, but I still owed it. The fact that most people pay their student loans means the government doesn't lose anything from student loans
Rather than "provide adequate (more) funding (taxes)for colleges" - how about ways to reduce cost? Beginning with the absurd costs of textbooks; administrative bloat; disparities between tenured and part-time teachers; etc
Lilly -> Dan Berg...
...and I will add sports in here. A good analysis was published by HP: How College Students Are Bankrolling The Athletics Arms Race
pgl -> Dan Berg...
"Beginning with the absurd costs of textbooks"
Here is where Greg Mankiw will tell you he needs to charge $300 a book for his text because he wants his kids to be rich.
And how does anyone propose to remedy monies being deducted from Social Security for delinquent student loans when the person (victim) cannot make timely payments because of AGE DISCRIMINATION IN EMPLOYMENT. While illegal, it is practiced by a majority of employers. Often the Soc Sec recipient is reduced to living at poverty level - even though they want to work and would if they could find paying employment.
Or does anyone want to remedy this? Just let the "old folks" starve and become homeless!!!!!!
"As a senator from Delaware -- a corporate tax haven where the financial industry is one of the state's largest employers -- Biden was one of the key proponents of the 2005 legislation that is now bearing down on students like Ryan. That bill effectively prevents the $150 billion worth of private student debt from being discharged, rescheduled or renegotiated as other debt can be in bankruptcy court.
Biden's efforts in 2005 were no anomaly. Though the vice president has long portrayed himself as a champion of the struggling middle class -- a man who famously commutes on Amtrak and mixes enthusiastically with blue-collar workers -- the Delaware lawmaker has played a consistent and pivotal role in the financial industry's four-decade campaign to make it harder for students to shield themselves and their families from creditors, according to an IBT review of bankruptcy legislation going back to the 1970s."
BCSanjait said.. . November 27, 2015 at 11:39 PM
80-85% of jobs today and in the future will not require post-secondary training or a university credential. If accelerating automation and elimination of service employment (retail, health care, education, gov't, legal, etc.) continues apace as anticipated, including middle- and upper-income employment, there will be still fewer jobs requiring post-secondary "education" that pay what was once perceived as breadwinner compensation.
Universities all over the US have since the 1970s-80s become costly public jobs programs primarily for females at low or no productivity and increasing cost to the private sector (as in the case of "health" care). The explosion in administrative employment and the resulting bureaucratic bloat and costs is ridiculous and unsustainable, including the promised pension and benefit payouts in the years to come.
Young people borrowing tens of thousands of dollars to attend private, for-profit colleges (???) or to study the humanities, social sciences, or business is a waste of time and money for the vast majority.
Most urban/suburban high schools have evolved into what might be described as college preparatory girls schools where a large majority of males are marginalized as necessary nuisances and the vast majority of kids learn little that is practical to participating as gainfully employed and self-supporting adults.
But that is not an accident, of course. Feminization and infantilization of the society and economy has been underway coincident with deindustrialization and financialization since the 1970s-80s.run75441 -> Sanjait... November 28, 2015 at 05:51 AM
there should be a subsidy for college, because otherwise people tend to underinvest in education. Individuals are often liquidity constrained or just short sighted.
But IMO we are doing the subsidies all wrong. We are offering subsidized loans and tax deductions. We should instead be using plain old grants more often. That's how you ensure access to people who would otherwise lack it.
But the grants should be relatively small. They should just be sufficient to coverage get of a public university education, without a little t of extra amenities. The critics of higher ed who say that subsidies are driving up the costs are half right. It's really consumer preferences, for the most part. But that doesn't mean government should contribute to that problem, of that taxpayers should pay limitless amounts. Some price pressure should still be left to exist.run75441
The cost containment of colleges is the same as what is needed for healthcare. The government should intervene since it is the principal financier in more ways than one.
I am not sure of what you know; but, this might be a good place to start. http://www.deltacostproject.org/ "The Delta Cost Project" http://www.deltacostproject.org/
There is a movement afoot from the Jason Delisles, Matt Chingos, and the Beth Akers of both the New America Foundation and Brookings who advocate interest rates do not matter, higher interest rates make sense for advanced degrees, and student loans should be risk sensitive using Fair Market Valuation techniques.
Getting a student loan is like checking into a Roach Motel. You can sign in via your signature; but, you can never check out without paying it off. If you default, it gets worst for you as stated in the story. So the risk to the Federal Gov and taxpayers is minimal. Indeed some would tell you, the Gov makes more money in default than in payoff. I also think there is more to the story than being revealed.
Fix interest rates and keep them low at http://angrybearblog.com/2015/11/for-profit-college-student-loan-default-and-the-economic-impact-of-student-loans.html . Indeed households without student loans are buying at a higher rate than those households with student loans. In some cases, it is worsening.
The highest default rate is with those who have student loans of < $10,000 [~39% of them have loans of less than $10,000 (NY Fed)] and are the result of Community Colleges. Potentially these are people attempting to improve their status in life. Student loan borrowers with $100,000 of debt had a default rate of 18% and are also the higher earners after graduation.
To my knowledge and experience with Federal Direct Loans, students can go into forbearance at any time. There is also a 3 year window of no interest accumulation. After the 3 years, interest accumulates. The 3 year window of no interest accumulation needs to be expanded to cover what we experienced since 2008 and perhaps go as long as 10 years. The 20-25 life time of IBR should be shortened to 10 - 15 years. This is not like students ordered up a 2008 recession, they were penalized unknowingly and were encouraged to seek a college education of sorts. The same holds true for those returning to college to better themselves.
Not only does student debt hurt the student, it is also playing out in the overall economy as I reported using NY Fed information at AB. Households with Student Loan Debt are a higher risk than those without Student Loan Debt. They are buying fewer homes and autos than households without Student Loan debt.
State financing has decreased. In Michigan it has gone from ~60% to ~30% with families picking up the load through various sources. Perhaps expanding the public service to erase college debt after 10 years would make more sense than doing so with strings attached.
Colleges do not appear to be cost sensitive to what the market may bear. There has always been a need for them and like healthcare colleges are allowed to increase as needed in cost without question. If you can not pay it upfront, you can always borrow it seems to rule. The new programs was supposed to hold colleges accountable for default rates. From the get-go, the administration let some of them off the hook.
Jul 30, 2015 | zerohedge.comCould you live without debt? Most Americans say that they cannot.
According to a brand new Pew survey, approximately 7 out of every 10 Americans believe that "debt is a necessity in their lives", and approximately 8 out of every 10 Americans actually have debt right now. Most of us like to think that "someday" we will get out of the hole and quit being debt slaves, but very few of us ever actually accomplish this.
That is because the entire system is designed to trap us in debt before we even get out into the "real world" and keep us in debt until we die. Sadly, most Americans don't even realize what is being done to them.
In America today, debt is considered to be just part of normal life. We go into debt to go to college, we go into debt to buy a vehicle, we go into debt to buy a home, and we are constantly using our credit cards to buy the things that we think we need.
As a result, this generation of Americans is absolutely swimming in debt. The following are some of the findings of the Pew survey that I mentioned above
*"8 in 10 Americans have debt, with mortgages the most common liability."
*"Although younger generations of Americans are the most likely to have debt (89 percent of Gen Xers and 86 percent of millennials do), older generations are increasingly carrying debt into retirement."
*"7 in 10 Americans said debt is a necessity in their lives, even though they prefer not to have it."
Most of us wish that we didn't have any debt, but we have bought into the lie that it is a necessary part of life in America in the 21st century.
It has been estimated that 43 percent of all American households spend more money than they make each month, and U.S. households are more than 11 trillion dollars in debt at this point.
When it comes to government debt, that is easy for us to blame on someone else, but all of this household debt is undoubtedly something that we have done to ourselves.
It all starts at a very early age for most of us. When we are still in high school, we are endlessly told about how important a college education is. All of the authority figures in our lives insist that we should just try to get into the best school that we possibly can and to not even worry about how much it will cost.
So many of us go into staggering amounts of debt before we even get out into the working world. We had faith that the "good jobs" that were being promised to us would be there when we graduated.
Unfortunately, in this day and age those "good jobs" end up being a mirage more often than not.
But whether or not we can find a good job, we still have to pay off all that debt.
According to new data that was recently released, the total amount of student loan debt in the United States has risen to a grand total 1.2 trillion dollars. If you can believe it, that total has more than doubled over the past decade.
Right now, there are approximately 40 million Americans that are paying off student loan debt. For many of them, they will keep making payments on this debt until they are senior citizens.
Another way that they get you while you are still in school is with credit card debt.
I got my first credit card while I was in college, and nobody ever taught me about the potential dangers.
Today, the average U.S. household that has at least one credit card has approximately $15,950 in credit card debt.
So let's say that you have that much credit card debt and you are paying an annual interest rate of 17 percent. If you only pay the minimum payment each month, it will take you 229 months to pay your credit card off, and during that time you will have paid $13,505.82 in interest charges.
In other words, you will almost have paid twice as much for everything that you originally bought with your credit card by the time it is all said and done.
This is why banks love to give you credit cards. If they can get back nearly twice as much money as they originally give you, they get rich and you get poor.
Most of us get loaded down with even more debt when we go to buy a vehicle. Instead of saving up and getting what we can afford, many of us end up getting the largest loans that we can qualify for.
In a previous article, I discussed the fact that the average auto loan at signing in America today is approximately $27,000. In order to get the monthly payments down to a level where we can afford them, many of these auto loans are now being stretched out for six or seven years. In fact, the number of auto loans that exceed 72 months has hit at an all-time high of 29.5 percent.
It is the same thing with home loans.
In the old days, it was extremely rare for a mortgage to be stretched over 30 years, but today that is pretty much the standard.
Sadly, most people don't understand how much money this is costing them.
If you take out a $300,000 mortgage at 3.92 percent and stretch it over 30 years, you will end up paying back a grand total of $510,640.
In other words, you will pay for two houses by the time you are done.
Yes, we all need somewhere to live, and there are definitely negatives to renting as well. But it is very important that we all understand what is being done to us.
And I haven't even discussed one of the most insidious forms of debt yet.
Have you noticed that most doctors and most hospitals will never tell you how much something is going to cost in advance?
They get us when we are at our most vulnerable. When there is something wrong with us physically, we are often desperate to get help. So we don't ask too many questions and we just go along with whatever they say.
But then later we get the bill and we are often completely shocked by what they have charged us.
If you are completely unethical, it is a great business model. People that are extremely desperate and needy come to you and you don't even have to tell them how much your services are going to cost. And then once they leave, you send them an absolutely outrageous bill for whatever you feel like charging.
Frankly, I don't know how a lot of people working in the medical field live with themselves. In their extreme greed, they are ruining the lives of millions of ordinary American families.
One very disturbing study found that approximately 41 percent of all working age Americans either currently have medical bill problems or are paying off medical debt. And collection agencies seek to collect unpaid medical bills from about 30 million of us each and every year.
Most of us will spend our entire lives paying off debt.
That is why we are called debt slaves – our hard work makes others extremely wealthy.
All by design. The great lie is that you should "work hard and be responsible".
Yeah? Why? Because it feeds the beast in Wall Street and Washington? The bailouts and free money for the banks/corporations/insurers wiped that idea off the slate.
Give me sound money and start producing again while offering me interest on my savings and we can start talking about responsibility. The example set by Wall Street and Washington is that debt is good, so what the fuck do they expect regular folks to do, keep carrying their bags?
Fuck you assholes, to Hell and back on a bed of nails.
European AmericanIgnorance is bliss
I must confess. I declared bankruptcy back in the late 80's. Not proud of that time in my life but it was legal and it literally saved me. Since then, "If I can't buy that product/service with the cash in my wallet, then I wasn't suppose to have it." has been my philosophy for the last 25 years, and even though the State stills owns my real estate, more or less (various taxes), I'm basically free. Debt is a killer of ones mental, physical and emotional immune system. I highly recommend avoiding IT at all costs. Debit card is the only plastic money in my wallet, along with some fiat currency. My bank is the color of Gold and SIlver.NoDebtyogibear
In General People are stupid
https://www.youtube.com/watch?v=k0he0cqHH20Hugh G Rection
And people wonder how Hitler took over in Germany.
People in the US are now more gullible than the Germans in the 20's.
Tough to keep liberty.
All the US needs is a full-fledged tyrant.chrsn
Speaking of gullible, take a look in the mirror.
Step one: stop tying in the quantity of your possessions with your self-worth. That shift in mindset alone will keep a lot of debt out of your life.NoDebt
This is one of the few topics around here that actually makes me feel good. 100% debt free for last ten years.
Paying off everything off ahead of time, cutting down the interest, was my primary goal for years.
Them damn bankers won't squeeze another penny out of me!LightSpender
Welcome to the club. Been a member for about that long myself.
I knew I'd like the financial freedom. I knew I'd like how much money it saved me.
What it took a few years debt-free to understand was that in a world measured in debt, I would become invisible. I can not be viewed using their technology any more. I'm a steath bomber with glider wings and a zero coefficient of drag.Korea98
If the 100th monkey effect applies here, we will be part of an awakened populace that watches the ctrl+alt+del of USD and the resultant house of cards.Treason Season
As we know debt is not always a bad thing. Sometimes it is worth becoming an indentured servent for a payout later.
We take out a loan, or at least most of us, for a house. This helps us build up equity instead of wasting it all on rent every month. By retirement people should own their home outright and not have to pay rent during their retirement. Most smart people are even able to downsize and stick some money in their savings.
A large percentage of people take out a loan for school. We have all read articled of idiots getting a 4 year degree in women's studies at a fancy private school, having a loan of $120,000, and never being able to pay it off. But the smart people who go to school maybe a state school, for a degree that is marketable do better than those without a degree.
A reliable car can help us save time, thus money, getting to and from work and other places. The key buying something basic and reliable and not a brand new sports car.
I'm glad we have the ability to borrow money. It has helped me immensily in my own personal life. And I would say, I would be worse off without it.
Ugh. You all know my screen name, what it stands for and my opinions on debt. Posting up on this subject borders on the tedious for me, but for those who haven't heard it yet, here it is....
If you have a valid financial reason for going into debt, that is to say you have a well-considered goal for your debt exposure, debt is not necessarily bad. For instance, if you are going to be a professional photographer you might need to buy some cameras and photography equipment that will be necessary for you to exist in that world. You are INVESTING in yourself. Nothing wrong with using debt for that if you can't pay as you go straight out of pocket.
Further down the totem pole is something like buying a house. A collateralized obligation. One you have the USE of the asset while you pay it off. I'm less enthusiastic about this sort of stuff but if it's a necessity (like having a place to live) I can't fault you for doing it. BUT IT WILL NEVER MAKE YOU MORE PRODUCTIVE OR INCREASE YOUR EARNING POWER. You feeling me on this? The key here is to pay that bitch down as fast as possible and minimize your interest expense because it's a pure dead-weight loss to you.
ANYTHING else, you don't need to go into debt over. So just don't. Better to do without than go into debt over anything beyond this point.
There really are very few exceptions to these simple rules (unless you are a government in which case everything is an excuse to go into debt since you're just spending other people's money).
Nov 09, 2015 | naked capitalism
It also never ceases to amaze me the number of anti-educational opinions which flare up when the discussion of student loan default arises. There are always those who will prophesize there is no need to attain a higher level of education as anyone could be something else and be successful and not require a higher level of education. Or they come forth with the explanation on how young 18 year-olds and those already struggling should be able to ascertain the risk of higher debt when the cards are already stacked against them legally. In any case during a poor economy, those with more education appear to be employed at a higher rate than those with less education. The issue for those pursuing an education is the ever increasing burden and danger of student loans and associated interest rates which prevent younger people from moving into the economy successfully after graduation, the failure of the government to support higher education and protect students from for-profit fraud, the increased risk of default and becoming indentured to the government, and the increased cost of an education which has surpassed healthcare in rising costs.
There does not appear to be much movement on the part of Congress to reconcile the issues in favor of students as opposed to the non-profit and for profit institutes.
Ranger Rick, November 9, 2015 at 11:34 am
It's easy to explain, really. According to the Department of Education ( https://studentaid.ed.gov/sa/repay-loans/understand/plans ) you're going to be paying off that loan at minimum payments for 25 years. Assuming your average bachelor's degree is about $30k if you go all-loans ( http://collegecost.ed.gov/catc/ ) and the average student loan interest rate is a generous 5% ( http://www.direct.ed.gov/calc.html ), you're going to be paying $175 a month for a sizable chunk of your adult life.
If you're merely hitting the median income of a bachelor's degree after graduation, $55k (http://nces.ed.gov/fastfacts/display.asp?id=77 ), and good luck with that in this economy, you're still paying ~31.5% of that in taxes (http://www.oecd.org/ctp/tax-policy/taxing-wages-20725124.htm ) you're left with $35.5k before any other costs. Out of that, you're going to have to come up with the down payment to buy a house and a car after spending more money than you have left (http://www.bls.gov/cex/csxann13.pdf).
Louis, November 9, 2015 at 12:33 pm
The last paragraph sums it up perfectly, especially the predictable counterarguments. Accurately assessing what job in demand several years down the road is very difficult, if not impossible.
Majoring in IT or Computer Science would have a been a great move in the late 1990's; however, if you graduated around 2000, you likely would have found yourself facing a tough job market.. Likewise, majoring in petroleum engineering or petroleum geology would have seemed like a good move a couple of years ago; however, now that oil prices are crashing, it's presumably a much tougher job market.
Do we blame the computer science majors graduating in 2000 or the graduates struggling to break into the energy industry, now that oil prices have dropped, for majoring in "useless" degrees? It's much easier to create a strawman about useless degrees that accept the fact that there is a element of chance in terms of what the job market will look like upon graduation.
The cost of higher education is absurd and there simply aren't enough good jobs to go around-there are people out there who majored in the "right" fields and have found themselves underemployed or unemployed-so I'm not unsympathetic to the plight of many people in my generation.
At the same time, I do believe in personal responsibility-I'm wary of creating a moral hazard if people can discharge loans in bankruptcy. I've been paying off my student loans (grad school) for a couple of years-I kept the level debt below any realistic starting salary-and will eventually have the loans paid off, though it may be a few more years.
I am really conflicted between believing in personal responsibility but also seeing how this generation has gotten screwed. I really don't know what the right answer is.
Ulysses, November 9, 2015 at 1:47 pm
"The cost of higher education is absurd and there simply aren't enough good jobs to go around-there are people out there who majored in the "right" fields and have found themselves underemployed or unemployed-so I'm not unsympathetic to the plight of many people in my generation."
To confuse going to college with vocational education is to commit a major category error. I think bright, ambitious high school graduates– who are looking for upward social mobility– would be far better served by a plumbing or carpentry apprenticeship program. A good plumber can earn enough money to send his or her children to Yale to study Dante, Boccaccio, and Chaucer.
A bright working class kid who goes off to New Haven, to study medieval lit, will need tremendous luck to overcome the enormous class prejudice she will face in trying to establish herself as a tenure-track academic. If she really loves medieval literature for its own sake, then to study it deeply will be "worth it" even if she finds herself working as a barista or store-clerk.
None of this, of course, excuses the outrageously high tuition charges, administrative salaries, etc. at the "top schools." They are indeed institutions that reinforce class boundaries. My point is that strictly career education is best begun at a less expensive community college. After working in the IT field, for example, a talented associate's degree-holder might well find that her employer will subsidize study at an elite school with an excellent computer science program.
My utopian dream would be a society where all sorts of studies are open to everyone– for free. Everyone would have a basic Job or Income guarantee and could study as little, or as much, as they like!
Ulysses, November 9, 2015 at 2:05 pm
As a middle-aged doctoral student in the humanities you should not even be thinking much about your loans. Write the most brilliant thesis that you can, get a book or some decent articles published from it– and swim carefully in the shark-infested waters of academia until you reach the beautiful island of tenured full-professorship.
If that island turns out to be an ever-receding mirage, sell your soul to our corporate overlords and pay back your loans! Alternatively, tune in, drop out, and use your finely tuned research and rhetorical skills to help us overthrow the kleptocratic regime that oppresses us all!!
subgenius, November 9, 2015 at 3:07 pm
except (in my experience) the corporate overlords want young meat.
I have 2 masters degrees 2 undergraduate degrees and a host of random diplomas – but at 45, I am variously too old, too qualified, or lacking sufficient recent corporate experience in the field to get hired
Trying to get enough cash to get a contractor license seems my best chance at anything other than random day work.
MyLessThanPrimeBeef, November 9, 2015 at 3:41 pm
Genuine education should provide one with profound contentment, grateful for the journey taken, and a deep appreciation of life.
Instead many of us are left confused – confusing career training (redundant and excessive, as it turned out, unfortunate for the student, though not necessarily bad for those on the supply side, one must begrudgingly admit – oops, there goes one's serenity) with enlightenment.
"I would spend another 12 soul-nourishing years pursuing those non-profit degrees' vs 'I can't feed my family with those paper certificates.'
jrs, November 9, 2015 at 2:55 pm
I am anti-education as the solution to our economic woes. We need jobs or a guaranteed income. And we need to stop outsourcing the jobs that exist. And we need a much higher minimum wage. And maybe we need work sharing. I am also against using screwdrivers to pound in a nail. But why are you so anti screwdriver anyway?
And I see calls for more and more education used to make it seem ok to pay people without much education less than a living wage. Because they deserve it for being whatever drop outs. And it's not ok.
I don't actually have anything against the professors (except their overall political cowardice in times demanding radicalism!). Now the administrators, yea I can see the bloat and the waste there. But mostly, I have issues with more and more education being preached as the answer to a jobs and wages crisis.
MyLessThanPrimeBeef -> jrs, November 9, 2015 at 3:50 pm
We all should be against Big Educational-Complex and its certificates-producing factory education that does not put the student's health and happiness up there with co-existing peacefully with Nature.
- "You must be lazy – you're not educated."
- "Sorry, you are too stupid for our elite university to admit, just as your brother was too poor for our rich club to let in."
- "I am going to kill you intellectually. I will annihilate you intellectually. My idea will destroy you and I don't have to feel sorry at all."
Kris Alman, November 9, 2015 at 11:11 am
Remember DINKs? Dual Income No Kids. Dual Debt Bad Job No House No Kids doesn't work well for acronyms. Better for an abbreviated hash tag?
debitor serf, November 9, 2015 at 7:17 pm
I graduated law school with $100k+ in debt inclusive of undergrad. I've never missed a loan payment and my credit score is 830. my income has never reached $100k. my payments started out at over $1000 a month and through aggressive payment and refinancing, I've managed to reduce the payments to $500 a month. I come from a lower middle class background and my parents offered what I call 'negative help' throughout college.
my unfortunate situation is unique and I wouldn't wish my debt on anyone. it's basically indentured servitude. it's awful, it's affects my life and health in ways no one should have to live, I have all sorts of stress related illnesses. I'm basically 2 months away from default of everything. my savings is negligible and my net worth is still negative 10 years after graduating.
student loans, combined with a rigged system, turned me into a closeted socialist. I am smart, hard working and resourceful. if I can't make it in this world, heck, then who can? few, because the system is rigged!
I have no problems at all taking all the wealth of the oligarchs and redistributing it. people look at me like I'm crazy. confiscate it all I say, and reset the system from scratch. let them try to make their billions in a system where things are fair and not rigged...
Ramoth, November 9, 2015 at 9:23 pm
My story is very similar to yours, although I haven't had as much success whittling down my loan balances. But yes, it's made me a socialist as well; makes me wonder how many of us, i.e. ppl radicalized by student loans, are out there. Perhaps the elites' grand plan to make us all debt slaves will eventually backfire in more ways than via the obvious economic issues?
Aug 05, 2010 | chronicle.com
Courtesy of Frontline, (c) 1995-2010 WGBH Educational Foundation
Mark DeFusco has worked with an investment bank and was a top manager at the U. of Phoenix.
Mark DeFusco has a new gig, and it may speak volumes about the evolving higher-education landscape and the fate of financially struggling private colleges.
Until a few months ago, Mr. DeFusco was working with major investors on plans to buy and bundle up ailing regionally accredited colleges. Now, believing that the once-friendly climate for such nonprofit conversions has grown chilly, he's shifted gears. Instead of buying up troubled colleges, he's going to work with two veteran academics at the University of Southern California to form a consultancy focused on saving them.
"I've been very busy these last five years telling for-profit businesses what's valuable" about themselves, says Mr. DeFusco. The goal of the consultancy is to help nonprofits capitalize on their most valuable traits, too.
"We don't want to see potentially good assets fail," says Mr. DeFusco of the new venture, which will be run out of Southern Cal's Center for Higher Education Policy Analysis and headed by Mr. DeFusco and the professors Guilbert C. Hentschke and William G. Tierney.
Considering how Mr. DeFusco has been in the thick of the education industry's most important trends for two decades, this latest move is worth watching.
Mr. DeFusco, 51, is a veteran of the for-profit-college industry. For the past five years, he's been a deal maker with Berkery Noyes, an investment bank that handles many mergers and acquisitions of education and information companies that often don't get publicized. From 2002 to 2005, as a new wave of private-equity investors came onto the scene, he was president of Vatterott College, a privately held institution based in St. Louis. He was a top manager at the University of Phoenix for 10 years before that, at a time when it was broadening its footprint and becoming the national powerhouse it is today.
Voluble and refreshingly unslick, Mr. DeFusco was the guy on the PBS Frontline documentary College Inc. who, with just a little coaxing, memorably discussed how "very, very well" he and his University of Phoenix colleagues made out financially as the university expanded. "I did better than I ever imagined," he said on the show.
Until a few months ago, he thought he might have found another gold mine of a business, one that would be not only lucrative for him and his enthusiastic investors, but also, he says, beneficial to higher education writ large.
His plan was to form an investor-backed "roll-up"-a company comprising several small nonprofit colleges that it would buy, and then continue to operate, but with a single back-office operation for administrative functions.
"You could really have efficiencies" without each college having its own bursar, its own registrar, he says, replaying a theme that many higher-education reformers before him have espoused.
It wasn't a pipe dream, he says. Working with a colleague with years of experience at Catholic colleges, Jack P. Calareso, president of Anna Maria College, he had identified 25 Catholic colleges, with enrollments ranging in size from 400 to 3,000, as acquisition targets.
"I wanted to get to them before they got onto your list," he says, referring to the list published in The Chronicle last year citing the 100-plus nonprofit colleges that had failed the Department of Education's financial-responsibility test.On Second Thought
Two East Coast private-equity investors, he says, "committed more resources than I could spend"-about $500-million over four years. And he says they weren't the sort of investors looking for a fast buck. (The investors asked him not to reveal their identities; Mr. Calareso, who sat in on some of the meetings with investors and colleges, confirmed the details of the venture in an interview.)
The idea, Mr. DeFusco says, was to operate the colleges with "a portfolio view," taking advantage of their strengths and economies of scale on things like marketing and student recruiting, keeping their Catholic mission, investing in new programs and facilities where it made sense, and eventually scrapping some programs that underperformed.
"I really wanted to get into heaven," he says. And the moves might have helped keep some traditional colleges alive, along with the values they perpetuate. "When my kids go to college, I hope there is still tenure and there's still academic freedom."
Mr. DeFusco says he had support from two bishops and actually had in hand three letters of intent from colleges willing to be acquired. (He wouldn't name them.) Then his lawyers advised him in early spring that the Higher Learning Commission of the North Central Association of Colleges and Schools, a regional accreditor that had been known for allowing such conversions over the past five years, had begun to take a tougher line. Eighteen of his 25 targets were in that accreditors' region.
The Higher Learning Commission rejected the conversion of nonprofit Dana College in July and of Rochester College in February, based on new policies it adopted in June 2009 and toughened in February.
Mr. DeFusco says he got the message. Before that commission approves another conversion, he believes, "it's going to be a couple of years-guaranteed."
Sylvia Manning, president of the commission since June 2008, says the new policy does not ban nonprofit-to-for-profit conversions-in fact the continued reaccreditation of two converted institutions, Waldorf College in January and the College of Santa Fe in October, came after the policy was adopted in June.
It was under her predecessor Steven D. Crow that institutions including the American College of Education (formerly Barat College), Grand Canyon University, and Ashford University (formerly the Franciscan University of the Prairies) were acquired by companies and allowed to significantly shift their emphasis to online education while keeping their accreditation.
She allows that in general, the new policy creates a much higher bar than what existed under her predecessor.
"It's quite possible people are reading this and are saying, 'Oh my God,'" Ms. Manning says, The new standards are not intended to block purchases or keep new owners from introducing new styles of management and curricula to the institutions they're acquiring, she says. "We're not saying you can't change them," she says of the colleges. But for colleges' accreditation to transfer upon a sale, "you can't transform them."
Ms. Manning says she never spoke with Mr. DeFusco and declined to comment on his assessment of her commission's stance, or of his sense that other regional accreditors are following suit. "My guess is that he's doing his own reading of tea leaves," says Ms. Manning.A New Deal
Mr. DeFusco says many of the forces that would have made his roll-up venture a success lead him to believe that his shift in gears toward a hands-on consulting project focused on struggling colleges will also keep him very busy, albeit probably with a smaller payday.
"A lot of schools are in trouble," says Mr. DeFusco. In the course of his research for his new venture, he and his team estimated that 15 to 45 colleges could fail each year for the next five years.
Too many colleges are discounting their tuition too heavily in pursuit of students, needlessly holding onto underutilized property that could better used to raise capital ("In this climate, those buildings are an anchor that drown you," he says), and maintaining administrative functions that could be better handled through outsourcing or collaboration.
Worse, he says, many boards of trustees are unaware of the severity of their institutions' problems. If you were on the board of a for-profit company operating like that, "you'd be sued," he says.
A tad less bluntly, Southern Cal's Mr. Tierney, a professor of higher education, echoes much of Mr. DeFusco's concern about the prospects for higher education, especially in the near term. "Some of us are getting very sober about a rebound," he says. The policy-analysis center has had a long interest in business-focused approaches and the role of markets in higher education. Mr. Tierney and Mr. Hentschke have written or co-edited two books on for-profit colleges.
So the idea of teaming up with Mr. DeFusco (who himself received a Ph.D. from Southern Cal) to work as turnaround consultants and help some colleges "stop the bleeding" was appealing, says Mr. Tierney. This month Mr. DeFusco will join the university as a senior research associate at the center.
Although there is no shortage of consultants already mining this territory-Bain, Huron, the Education Advisory Board, and advisers organized by the Association of Governing Boards, to name just a few-Mr. Tierney says the combination of Mr. DeFusco's business experience and his and Mr. Hentschke's understanding of academic culture and the role of shared governance gives their venture a niche. Also, he notes, it may be the first such higher-education consulting group to operate from within a university.
The consultants will help with short-term strategies, governance, and operational audits. They will also offer "workout" expertise; workout is the term used when companies go out of business. As a university effort, the consultancy can also call upon the expertise of other academics in the School of Education and the rest of the university. The consulting entity will pay a portion of its earnings as overhead to Southern Cal in return for administrative support.
Mr. Tierney says he hopes to begin signing up clients by Labor Day. "If nobody calls by January 1, well, then this was an interesting idea."
It all seems pretty fast-paced to Mr. Tierney. But that's been a lesson in itself for Mr. DeFusco, as he prepares to immerse himself more directly in traditional academe. "August off?" he responded incredulously when Mr. Tierney told him the schedule. August is when colleges are sweating the most over whether enough students will show up to cover the budget. "This is your most important month," he says.
For higher education, this new gig may or may not be a bellwether. For Mr. DeFusco, it will certainly require some adjusting.
2011 › Volume 63, Issue 03 (July-August)Dangers and Opportunities of the Present Crisis
Education , Political Economy
Jammed into a thundering crowd of thousands of chanting people in Madison, Wisconsin, it looks like a dam has broken. The new Wisconsin Tea Party governor brazenly accelerated what has been a bipartisan agenda to undermine public education and weaken teacher and other public employee unions. His "budget repair bill"-an assault on public employee unions, schools, and low-income health care-was met with immediate, massive, determined resistance that began with a walkout by Madison public school teachers.
Over three weeks, thousands of teachers, social workers, firefighters, and public and private sector workers of every stripe have demonstrated in communities across the state and piled into busses headed to the state capital. Protesters occupied the capital building for more than two weeks. Two of the rallies were estimated at over one hundred thousand people. There were many signs, such as "Recall Walker," "If you can read this, thank a teacher," and "Stop the War on Workers," but also something more: handmade signs saying "This is Class War" and "End Corporate Greed." A young woman at the rally on March 11 after the state legislature passed the governor's union-busting bill, held up a placard proclaiming, "Teacher by Day, Freedom Fighter by Night."
As I write this, in March 2011, a sleeping giant is stirring. The broad U.S. working class has absorbed blow after blow, concessions and job losses one after the other, stagnating wages for thirty years, and two wars costing trillions of dollars. The greatest capitalist crisis since the Great Depression brought a trillion-dollar bailout of the biggest banks and investment houses, the loss of ten million homes to foreclosure by the banks, and 10 percent official unemployment. A broad process of structural adjustment is under way to make the working and middle classes pay for the crisis created by Wall Street. But recent attempts at the state level to impose austerity measures may be just too much for people to take. The attack on public workers and sell-off of public assets-from schools, to municipal utilities, to bridges and roads-may go too far. This is a watershed moment.
Despite somewhat different tactics, both the Republicans and the Democrats, as parties of Wall Street, aim to impose austerity on the working class in order to deal with the fiscal crisis of the state. The aim is to cut domestic programs and public services, and teacher unions are a prime target. Merit pay for teachers and union "flexibility" is a part of the Obama administration's education program. From this perspective, compliant union officials are a means to instruct teachers and other public employees to make concessions "voluntarily." This approach was articulated by a Wisconsin public official who defended teacher and other public unions' right to exist because unions have been a means to negotiate concessions in wages and benefits peacefully. But some ideologically driven Republican legislators want to go further to make deep cuts in the education budget and break teacher unions and organized labor entirely. This would eliminate the remaining organized working-class resistance against the attempt to make workers pay for the crisis, and would undermine a key support for the Democratic Party.
In Wisconsin, union responses to the Tea Party agenda were mixed. Despite the fact that their own data show real earnings for Wisconsin teachers declined by 2.3 percent over the last decade,1 the leadership of the Wisconsin Education Association Council and some other unions gave in to Walker's demand for financial concessions early on. They drew the line, however, at automatic union dues collection and the right to bargain collectively over working conditions such as class size, that affect children's learning. Their slogan was "It's not about the money, it's about our rights [to bargain collectively]." Other labor organizations, notably the South Central Federation of Labor in Wisconsin and the National Nurses United, put the blame on Wall Street and called for closing corporate tax loopholes. The nurses union said, "Working people did not create the recession or the budgetary crisis facing federal, state and local governments-and there can be NO more concessions, period."2
There is a long and complex road ahead with no clear outcome. But education is the frontline in class warfare by the rich against the working class. The assault on public education, teachers, and their unions has been evolving over the past thirty years as part of the neoliberal restructuring of the global capitalist economy, but the current crisis of capitalism has accelerated this assault.3 Education has been a key sector in the neoliberalization of social policy and the neoliberal political economy of cities. The resistance to these policies has been broad at classroom and school levels and in a growing movement of education activists allied with parents and students. Education, for those in power, plays a key role in social reproduction of the labor force and in ideological legitimation of the social order. Those who, conversely, have seen education as a way to strengthen democratic participation in society and human liberation have always contested these goals. There is a rich history of people of color, women, workers, educators, and social movements fighting for democratic, inclusive, liberatory education. The crisis and the accelerated assault on teachers and public education are sharpening the contest over the right to public education and the role of education in society.
In this article, I review the neoliberal project to restructure education, particularly its relationship to neoliberal urban development, and responses to it. I discuss implications of privatization and austerity measures for public education and its function in social reproduction. I argue that this crisis is a moment of danger but also opportunity, not only to defend public education, but also to reshape it as part of the struggle for a new social order based on human liberation.Neoliberal Restructuring of Public Education
When President Obama appointed Arne Duncan, former-CEO of Chicago Public Schools, to head the U.S. Department of Education in 2008, he signaled an intention to accelerate a neoliberal education program that has been unfolding over the past two decades. This agenda calls for expanding education markets and employing market principles across school systems. It features mayoral control of school districts, closing "failing" public schools or handing them over to corporate-style "turnaround" organizations, expanding school "choice" and privately run but publicly funded charter schools, weakening teacher unions, and enforcing top-down accountability and incentivized performance targets on schools, classrooms, and teachers (e.g., merit pay based on students' standardized test scores). To spur this agenda, the Obama administration offered cash-strapped states $4.35 billion in federal stimulus dollars to "reform" their school systems. Competition for these "Race to the Top" funds favored states that passed legislation to enable education markets.
Race to the Top, although originating in U.S. government, is actually part of a global neoliberal thrust toward the commodification of all realms of existence. In a new round of accumulation by dispossession, liberalization of trade has opened up education, along with other public sectors, to capital accumulation, and particularly to penetration of the education sectors of the periphery (e.g., Latin America, parts of Asia, Africa). Under the Global Agreement on Trade in Services, all aspects of education and education services are subject to global trade.4 The result is the global marketing of schooling from primary school through higher education. Schools, education management organizations, tutoring services, teacher training, tests, curricula online classes, and franchises of branded universities are now part of a global education market. Education markets are one facet of the neoliberal strategy to manage the structural crisis of capitalism by opening the public sector to capital accumulation. The roughly $2.5 trillion global market in education is a rich new arena for capital investment.5
In the United States, charter schools are a vehicle to commodify and marketize education. Charter schools are publicly funded but privately operated. They eliminate democratic governance, and, although they may be run by nonprofit community organizations or groups of teachers or parents, the market favors scaling up franchises of charter school management organizations or contracting out to for-profit education management organizations that get management fees to run schools and education programs.6 For example, EdisonLearning, a transnational for-profit management organization, claims it serves nearly one-half million students in twenty-five states in the United States, the United Kingdom, and Dubai.7
The market mechanisms and business management discourses and practices that are saturating public education in the United States are all too familiar to teachers and students worldwide. Globally, nations are restructuring their education systems for "human capital" development to prepare students for new types of work and labor relations.8 This policy agenda has been aggressively pushed by transnational organizations such as the World Bank, International Monetary Fund, and Organization for Economic Cooperation and Development. Objectives and performance targets are the order of the day, and testing is a prominent mechanism to steer curriculum and instruction to meet these goals efficiently and effectively.
In the United States, the neoliberal restructuring of education is deeply racialized. It is centered particularly on urban African American, Latino, and other communities of color, where public schools, subject to being closed or privatized, are driven by a minimalist curriculum of preparing for standardized tests. The cultural politics of race is also central to constructing consent for this agenda. As Stephen Haymes argues, the "concepts 'public' and 'private' are racialized metaphors. Private is equated with being 'good' and 'white' and public with being 'bad' and 'Black.'"9 Disinvesting in public schools, closing them, and opening privately operated charter schools in African-American and Latino communities is facilitated by a racist discourse that pathologizes these communities and their public institutions. But "failing" schools are the product of a legacy of educational, economic, and social inequities experienced by African Americans, Latinos/as, and Native Americans.10 Schools serving these communities continue to face deeply inequitable opportunities to learn, including unequal funding, curriculum, educational resources, facilities, and teacher experience. High stakes accountability has often compounded these inequities by narrowing the curriculum to test preparation-producing an exodus of some of the strongest teachers from schools in low-income communities of color.11
Neoliberalization of public education is also an ideological project, as Margaret Thatcher famously said, to "change the soul," redefining the purpose of education and what it means to teach, learn, and participate in schooling. Tensions between democratic purposes of education and education to serve the needs of the workforce are longstanding. But in the neoliberal framework, teaching is driven by standardized tests and performance outcomes; principals are managers, and school superintendents are CEOs; and learning equals performance on the tests with teachers, students, and parents held responsible for "failure." Education, which is properly seen as a public good, is being converted into a private good, an investment one makes in one's child or oneself to "add value" in order better to compete in the labor market. It is no longer seen as part of the larger end of promoting individual and social development, but is merely the means to rise above others. Democratic participation in local schools is rearticulated to individual "empowerment" of education consumers-as parents compete for slots in an array of charter and specialty schools. In Chicago, twelve thousand parents and students attended the 2010 "High School Fair" sponsored by Chicago Public Schools, and six thousand attended the "New Schools Expo" of charter and school choice options. The political significance of this neoliberal shift stretches beyond schools to legitimize marketing the public sector, particularly in cities, and to infuse market ideologies into everyday life.New Orleans–Feasting on Tragedy 12
Nowhere did the rollback of social welfare policies and public institutions occur with greater force than in hurricane-devastated New Orleans. In the words of George Lipsitz, the aftermath of hurricane Katrina ushered in an orgy of "legalized looting to enable corporations to profit from the misfortunes of poor people."13 Education was at the leading edge. The state at all levels, in alliance with local and national capital and neoliberal think tanks, took advantage of the chaos wreaked by Katrina and the exodus of low-income working-class African Americans from the city to dismantle their public schools. This was a strategic move to exclude low-income African Americans from the city altogether. They not only had no homes to return to, they had no schools. Before Katrina hit in August 2005, there were sixty-three thousand students in New Orleans public schools; about twenty-four thousand began classes there in the fall of 2008.14
Just weeks after the hurricane, the state of Louisiana took over one hundred public schools and began turning over millions of dollars of taxpayer money to private organizations to run them. The state dismissed all forty-five hundred public school teachers, broke the city's powerful black-led teachers' union, and dismantled the school system's administrative infrastructure.15 Right-wing foundations quickly issued reports calling for vouchers, and President Bush proposed $1.9 billion for K-12 students with $488 million targeted for vouchers to be used in schools anywhere in the country. An influential report by the Urban Institute hailed New Orleans as an opportunity for a grand experiment to decentralize and privatize the public school system through vouchers and charter schools.16 Less than a month after the hurricane devastated the city, the U.S. Department of Education gave the state of Louisiana $20.9 million to reopen existing charter schools and open new ones, and nine months later, the department gave the state an additional $23.9 million for new charter schools, most in New Orleans. Prior to Katrina, there were five charter schools in the city. After the hurricane, the state took over most of the schools and established the Recovery School District, an open arena for charter schools. Of the fifty-five schools opened in New Orleans in 2006-2007, thirty-one were public charter schools.17 In 2010, out of eighty-eight public schools in New Orleans, sixty-one were charters run by a variety of operators.18 The pro-market Fordham Foundation judged New Orleans the best city in the United States for charter school expansion.19 All this was done by government fiat guided by think tanks such as the Urban Institute, and backed by corporate foundations such as the Gates Foundation. Excluded were the working-class African American and Latino/a parents, students, teachers, and community members, many of whom had been literally excluded from the city itself by redevelopment policies that made it impossible to return.20
It would be hard to deny that New Orleans's schools were in bad shape before the hurricane. In 1997 per-pupil school funding was 16 percent lower than the average of poorly funded urban districts nationally.21 The New Orleans situation reflects a long-term pattern of disinvestment in inner-city areas, beginning with cuts in federal funding to cities in the 1980s, followed by the shift to an entrepreneurial model of urban governance that prioritizes attracting private investment, tourism, and real estate investment.22 Today charter schools in New Orleans are part of creating a "good business climate" in a "revitalized" (gentrified) whiter New Orleans.Chicago–Disinvestment, Privatization, and Gentrification
Chicago is another exemplar of the logic of disinvestment and privatization that is playing out in urban school districts.23 Chicago's Renaissance 2010 education plan was carried out in partnership with the state and the Commercial Club of Chicago, an organization of the powerful corporate and financial interests in the city. The object was to close public schools and expand charter schools. It has become a national model enshrined in the propagandistic claim of "the Chicago Miracle." Across African-American communities, the mayoral-appointed school board has closed schools on the grounds of low achievement. Others, particularly in gentrifying Latino/a communities, have been closed for low enrollment, despite evidence to the contrary. The board has replaced neighborhood schools with charter schools or selective enrollment schools that most neighborhood children are unable to attend. School closings have resulted in increased mobility, spikes in violence, and neighborhood instability as children are transferred to schools out of their neighborhoods.24 Moreover, Renaissance 2010 has not increased educational opportunities for most students, with 80 percent of displaced students attending schools no better than the ones that were closed.25
This policy eliminates schools that are anchors in their communities, contributing to further disinvestment. In gentrifying areas, closing neighborhood schools and replacing them with schools branded for the middle class facilitates the displacement of working-class families. Chicago, like New Orleans, is an example of the intertwining of education policy and neoliberal urban development. Real estate development is a pivotal sector in urban economies, and closing neighborhood public schools in disinvested areas to open up elite, selective-enrollment public schools or prestigious charter schools is part of the neoliberal restructuring of urban space.26 This nexus of education policy and real estate development is located in the spatial logics of capital-the physical location of production facilities, the built environment of cities, and places of consumption are devalued and selectively rebuilt in order to establish a "new locational grid" for capital accumulation.27 In other disinvested, low-income neighborhoods, students attending under-resourced and struggling public schools are a ready consumer base for the proliferation of charter schools, particularly large charter school chains that target these areas.
In response, parents, teachers, and students are challenging school closings and market solutions, and are demanding democratic participation and community-driven processes to improve public schools and increase resources. In fall 2010, parents at an elementary school in a Mexican immigrant community in Chicago occupied a school field house for forty-three days to force the school board to agree to construct a school library. In 2001 parents in another working-class Mexican neighborhood were compelled to conduct a nineteen-day hunger strike to get a new high school in their community, after the school board had used funds allocated for their school to build two state-of-the-art, selective-enrollment high schools in gentrifying areas of the city. Both of these actions followed years of petitioning the mayor-appointed board of education with no results. Organized resistance to neoliberal policies has prevented some school closings and, most significantly, also spawned a progressive caucus that won the leadership of the Chicago Teachers Union, the third largest teachers' union local in the country.The "Good Sense" in Neoliberal Education Policy
Yet some measures to reign in teacher unions have support on the ground, as teachers and parents have gravitated to privately run charter schools and vouchers. Certainly venture philanthropists (such as the Gates and Fordham Foundations), charter school operators, business federations (such as Chicago's Commercial Club), and politicians of both parties have deployed enormous economic, political, and symbolic resources to promote education markets and performance pay for teachers as the only alternative to struggling neighborhood public schools and "bad" teaching.28 They have raised the cap on charter school expansion, funded charter school ventures, and established policies like those in New Orleans and Chicago to expand education markets. However, neoliberal policies are not simply imposed from above. They also materialize through the actions of parents and teachers navigating a disinvested, degraded, and often racist public school system. Looked at this way, neoliberalism is a process that works its way into the discourses and practices of schools, through the actions of not only elites, but also marginalized and oppressed people acting in conditions not of their own making.
Tom Pedroni demonstrates this in his study of African-American parents' participation in the Milwaukee voucher movement.29 Pedroni interprets the participation of African-American parents in the voucher program against a background of prolonged struggles and failures to win a modicum of educational equity and respect for their children and themselves as public school parents. Pedroni argues that, for these parents, the identity of educational consumer offers greater dignity and agency than that of citizen-supplicant to an unresponsive and racist public school system that has never fully included African-American children. Like charter school parents and teachers I interviewed in Chicago, Pedroni proposes that parents see themselves as education consumers in the face of a post-welfare state that offers no real alternative.30 Drawing on Gramsci's theory of "good sense" in the ideological construction of hegemonic social alliances, this insight is an opening to reframe the struggle to defend public education by drawing on the real concerns of parents who ally themselves with education markets.
There is no point in romanticizing public schools (or other welfare state institutions). While they have provided free universal education and spaces where people can make claims for justice, and are sometimes empowering and liberating, they have historically been saturated with inequalities and exclusions.31 The benefits the white middle class has had from public schools have often been allowed it to ignore a thoroughly inequitable public school system. Critical education scholars have long criticized public schools for reproducing a stratified labor force and the dispositions and ideologies that support capitalism, racism, and gender oppression. Exclusionary, paternalistic, disrespectful, even brutal treatment of African American, Latino/a, and other people of color and women at the hands of public housing authorities, public hospitals, the police and judicial systems, public welfare agencies, elected officials, city agencies, and schools make existing public institutions deeply problematic places. And teacher union leaders have too often failed to take up progressive causes and ally themselves with working-class parents and communities of color.32
Understanding the appeal of charter schools, choice, and teacher accountability is essential to build alliances not only to defend public education in this period but to develop a program for democratic and just public schools, as well. Resisting predatory neoliberal policies requires acknowledging and grappling with the exclusions and inequities of public institutions.33 This raises the questions: What of public education do we wish to defend; what must be reconstructed, and how can it fulfill its democratic potential?34Structural Adjustment and Education
As the Great Financial Crisis of 2007-08 hit, the Bush and Obama administrations, in league with Wall Street, moved swiftly to socialize the losses of investors through massive taxpayer funded bailouts. This was followed by furloughs (wages cuts) for public workers and worker concessions in the bailed-out private sector (e.g., auto) under the rationale that "there is no alternative" and "we all have to sacrifice."
As the crisis continues to reverberate, states and municipalities face fiscal crises of monumental proportions. The loss of tax revenues combined with government losses in the financial markets have thrown state budgets across the country into massive debt. Public worker pension funds, health insurance benefits, and funding for public services are in real trouble. At the time of this writing, California has a projected budget deficit of $28 billion over the next eighteen months.35 Instead of raising taxes on the rich and corporations, state governments are selling off public assets and imposing austerity measures on the poor, workers, and the middle class, with public-sector workers an immediate target. The state of California is instituting draconian cuts in education, health, and programs for youth and the elderly. This scenario is repeated in state legislatures and city halls across the country. In Wisconsin, Walker pushed through $100 million in tax cuts to corporations, while his bill would cut over $800 million for education alone.36 The broad working class is expected to endure repeated reductions in wages, pensions, and hard-won benefits, drastic cuts in public services, and further loss of personal assets, particularly homes, while municipal services and infrastructure such as bridges and roads are sold off to investors.
City governments are particularly hard hit by the crisis because of their reliance on real estate taxes, housing markets, and investments in financial markets. Urban school districts have already laid off thousands of teachers, increased class sizes, pushed to reduce teacher pensions, and cut out music, gym, kindergarten, bilingual programs, after-school and youth programs, and more. These austerity measures are certain to hit hardest those least able to bear them, low-income schools of color, where these are the very programs that offer some hope.37Dangers and Opportunities of the Present Moment
Social austerity ultimately creates contradictions for capital as well. As capital continues to flow into the inflated financial sector at the expense of the productive sector, and as the state pays for the crisis with cuts in education and general social welfare, there is an unfolding crisis of social reproduction.38 Public education plays an important role in the reproduction of the labor force, political legitimation, and social stability. The problem with franchising and contracting out schools to an assortment of private operators is that the state has less control over these functions of schools. Inflated class sizes, cuts in education programs, and teachers' eroding salaries and working conditions can only degrade public education, particularly in low-income schools. This will exacerbate an already two-tiered education system. Detroit's Emergency Financial Manager Robert Bobb (a graduate of the Broad Foundation's Superintendent Academy) has proposed closing half the district's schools and putting up to sixty students in a classroom.39
Under Governor Walker's plan, two thousand Wisconsin teachers and school staff would lose their jobs, and the average teacher would lose $5500 to $7000 in net compensation. The average 2011 teacher salary in Wisconsin is $50,627.40 According to a new report by the OECD (Paine & Schleicher, 2011), the pay, working conditions, and qualifications of U.S. teachers are already low in comparison with those of teachers in other advanced economies.41 From the standpoint of capital, serious disinvestment in public education has consequences for the preparation of its workforce. It also has implications for social stability, with more students in affected schools dropping out. The security state is a looming presence in this scenario.
Wisconsin foreshadows the political cost of undermining the living standards and expectations of those who have come to be defined as "middle class," such as teachers. The Tea Party agenda is laying bare the capitalist offensive against the working class. A twenty-foot long banner proclaiming, "Tax the Rich" hung from the third floor of the Wisconsin State Capitol rotunda throughout the people's occupation. With leaflets and treatises plastering the walls of the capitol, rallies filled with home-made placards, and hours of conversation between unlikely allies, the three-week-long Wisconsin occupation and rallies were a giant democratic political forum. And this was replicated in town squares throughout the state. For many, this was their first political protest.
The results of this politicization are yet to be seen, but the budget bills themselves are making connections for people between cuts in education and the assault on teacher unions with those of other public- and private-sector workers and farmers. Legions of firefighters and their families from towns around the state marched militantly through the capitol building, fists pumping the air as they chanted, "The workers united will never be defeated."
In addition to slashing state aid to public schools by nearly $834 million, Walker has proposed sweeping changes to Medicaid-funded programs including BadgerCare, which provides health coverage to low-income Wisconsin families, and a $96 million cut in aid to local governments, including cities, towns, and counties. At the rally of over one hundred thousand on March 12, farmers, in a show of "Farm Labor Unity," drove their tractors to Madison for a "tractorcade" around the capitol building. Roughly eleven thousand farmers receive BadgerCare. This is a compelling moment to connect attacks on education to the capitalist crisis, particularly the parasitic financialization, war spending, and tax cuts for the rich that have looted the public coffers, bankrupted states, and threaten our schools. This is, moreover, an opportunity to expose the crisis-ridden logic of capitalism itself and to engage in serious discussion about the world we wish to see.The Potential of an Education Movement
In the past few years, a multifaceted education movement in and outside classrooms has emerged against neoliberal education restructuring and in resistance to racism, gender and heterosexist oppression, and militarization of schools. Liberatory education projects and social-justice-oriented schools have sprouted up in cracks in the public system. There are freedom schools and popular education projects outside public schools, and community-based youth activist organizations across the country. The immigrant rights movement and organized opposition to the criminalization of youth through the "school to prison pipeline" have begun to link political and educational issues. Organizations of activist teachers and community educators in a number of cities have joined together to form national networks. (The Education for Liberation Network and Teacher Activist Groups are examples.) These groups have joined parents and students in community coalitions to stop school closings and privatization, prevent mayoral takeovers of urban school districts, defend undocumented students, and challenge high-stakes testing. With the victory of a progressive caucus to lead the Chicago Teachers Union, there is also a significant progressive force in the heart of the American Federation of Teachers. Although there is some overlap, these various streams are not yet organized around a coherent program or analysis of the problem.42
The outpouring of teachers and other workers against union busting and austerity budgets has changed the terrain. Thousands of people who have never attended a protest before are in the streets and engaged politically. So far, this motion is mainly defensive, and some are willing to make concessions to help capitalism extricate itself from the crisis.43 On the one hand, there is the possibility that the protests will be subsumed by the electoral politics of the Democratic Party, much like the current focus in Wisconsin on recalling Republican legislators, or diverted to scapegoating people of color and immigrants. On the other hand, the challenge to taken-for-granted living standards opens a space to see social arrangements differently. This is a moment that can reveal the systemic connections between the bailout of Wall Street and social privations, a moment to connect attacks on workers with other social struggles-particularly to see the common threads between wars for domination, oppression of people of color, and the unfolding austerity regime.44
Buried in Governor Walker's proposed 2012-2013 budget is a measure to repeal access to in-state tuition for undocumented students and eliminate Food Share benefits (food stamps) for documented ("legal")immigrants.45 How Wisconsin's majority white teachers, union members, and farmers will respond will be important. Bridging deep divisions along lines of race, ethnicity, and immigrant status, and challenging racial oppression are central to building a counter-hegemonic alliance with the power to defeat austerity measures and move toward a proactive politics that challenges capitalism itself. Although it is only now coalescing, a movement that links education with immigrant rights and other social struggles can play an important role in teacher unions and in student community, and parent organizations.
In classrooms, critical educators are positioned to help young people understand why their schools are under attack and to "connect the dots" to the structural crisis of capitalism. Revitalized teacher unions are in a strategic position to insist that Wall Street pay for the crisis. Although the U.S. context is different, there is much to learn from social movement teacher unionism outside the United States (e.g., in Oaxaca, Honduras, and South Africa) and its central role in social struggles for democracy, against neoliberalism, and for social liberation.46 This is a moment not simply to defend the public education we have, but to advocate for a just, inclusive, democratic, humanizing education that prefigures the society we wish to have-one premised not on exploitation but on the full development of human beings in social solidarity.
Pauline Lipman (plipman [at] uic.edu) is an education activist and professor of educational policy studies at University of Illinois at Chicago. Her latest book is The New Political Economy of Urban Education: Neoliberalism, Race, and the Right to the City (2011).
Jun 06, 2019 | www.zerohedge.com
Majority Of Recent College Grads Don't Have Jobs Lined Up, Survey Shows
by Tyler Durden Thu, 06/06/2019 - 13:21 2 SHARES Twitter Facebook Reddit Email Print
American students carry an aggregate pile of student loan debt equivalent to roughly $1.5 trillion, a generational burden that has helped contribute to plunging birth rates, lower home-ownership rates among young people, and even lower rates of stock ownership, as more young people dedicate more financial resources to paying down debt.
But to gauge exactly how much a students' finances factor into their decisions about which school to attend and which majors to choose, MidAmerica Nazarene University surveyed 2,000 recent graduates from around the country to learn more about how they financed their degrees, and how much they will owe after graduation.
Given the cost of higher education in the US, the majority of students answered that post-grad job prospects influenced the major they selected (those who answered 'no' either really enjoy studying STEM, or majored in gender studies).Recommended videos Powered by AnyClip The Best Way To Check And Boost Credit Scores Play Unmute Current Time 0:00 / Duration 0:49 Loaded : 100.00% Fullscreen Up Next
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It might seem surprising given the financial stakes, but the survey also showed that more than 60% of recent grads didn't have jobs lined up when they received their diplomas.
For those who did choose their careers based on financial considerations, a majority said they would have picked another line of work if finances weren't a consideration (but hey, we can't all be artists).
Once upon a time, there wasn't as much of a correlation between a students' field of study and their eventual chosen career (investment bankers who studied English at Middlebury College wound up on Wall Street thanks to 'Uncle Jim's' connections). But as the world of higher education becomes increasingly costly and cut throat, situations like this are becoming increasingly rare.
One of the more telling data points in the study was the gauge of graduates' feelings about the job market. Even with unemployment at multi-decade lows, a majority of graduates had a negative outlook on the job market.Florida Millionaire Predicts 'Cash Panic' In 2019
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The overwhelming majority of students took out loans to pay for some or all of college, with 71% taking out loans and the average amount borrowed equivalent to just over $25,000.
In addition to taking on loans, most college students receive at least some help from family members or other sources, as only one-quarter of respondents said they completely self-financed their degree.
On average, students expect to pay off their loans in 9.5 years, meaning that most of these students will be in their mid-30s when they finally reach a zero balance.
Imagine what that number would be if students had no help from their families?
CatInTheHat , 20 seconds ago linkGophamet , 6 minutes ago link
Even with unemployment at multi-decade lows, a majority of graduates had a negative outlook on the job market."
Well, we all know thats ********. The real unemployment rate is 21.2% (shadow stats).
There is a gap here as to why these graduates don't have jobs lined up when they graduate, which is not mentioned in the article.
1. Fields of occupation that do make money are saturated. You get your foot in the door via 2 ways: sheer luck or you know someone in that field.
2. Most jobs offered are at minimum wage. Another big secret that is never told. The average hours worked in the US is 34.5. Part time. Also, missing here is what kind of degree students in the study are graduating with. So I assume this is bachelor degrees. Something looked upon today as increasingly like an associate's degree, meaning if you really want to risk more debt & RISK that you MIGHT find a job when you graduate, you will need a Masters or a doctorate. This increases your loan burden to 60,000 for your average masters or more. 100,000+ for a doctorate.
3. Student loans and the increasing need for a Masters degree is a major scam to accrue more debt slavery. A Masters DOES NOT increase your chances Today of a job in your field of study. Ten years ago my daughter graduated with 8 friends and only 2 got jobs in their chosen fields of study, one a teacher who doesn't make much at 37,000 a year and the other went on to get a doctorate and did get a job in her chosen field of study at great pay but with nearly 200,000 in student loan debt.
Before offshoring Americans not cut out for college went to work at the local plants like their parents did. The propaganda ever since has been you're a nobody and has been, only to attend college accruing tens of thousands of debt, to wind up in some **** minimum wage job because you can't find one in YOUR field of study or you can and learn that starting pay is minimum wage but you take whatever is offered because if you don't you're in trouble when loans come due 6 months later.
And that right there turns promising young people into debt slaves. Just as is planned by *** oligarchs at the FED RESERVE.delta0ne , 8 minutes ago link
Parents need to get involved in all facets of determining aptitude and major selection that can pay dividends in the job market. Too many kids just go to college as an extension of high school with the "I'll figure it out later" attitude. These are also the ones you see working as cashiers who damn near have a **** hemorrhage when they have to make change without the help of the register. Do your kids a solid and work with them in their career quests and by all means, get involved with their education and most important, read to them when they're young. It is ******* criminal to charge tremendous tuition and graduate students ill prepared for the challenges of life. Then again if you got the cash, you can probably buy a degree from some Cuck in the Dean's office!EcoJoker , 9 minutes ago link
when I graduated College (Cumlaude btw) nobody lined up to hand me decent job with nice salary. AND we didn't have Lyft or Uber back then. so what's changed besides the fact that we have Uber and Lyft?Dutch1206 , 16 minutes ago link
Here in shitinois, there is harper college, which is free if you pay your real estate taxes and maintain good grades. Why the **** would anyone pay for a university to bend you over.AOC , 39 seconds ago link
Because the economy never recovered from 2008-2009. The only thing that came out of that crisis is cheaper and easier debt. People bash millennials but then neglect to acknowledge the generation that raised them. This **** storm started with the Baby Boomers and has only gotten worse.
Here's things most millennials weren't doing in 2008/2009:
1.) Buying more house than they could afford with those great teaser rates
2.) Selling mortgages for houses people couldn't afford.
3.) Running TBTF banks.
4.) Using derivatives to hedge derivatives to hedge derivatives.
5.) Working in Washington, voting to bail out said TBTF banks, even though we operate in a "capitalist" country.
I'm not making up excuses for my situation because I'm not saddled with loan debt, have a good job, and am self-supporting. But let's lay the blame where it should be. On the Boomers. The generation that had it the easiest out of all of them and basically contributed nothing positive to society other than piling up debt.
SummerSausage , 21 minutes ago link
you are blaming the victim, and if you don't realize that you should go learn how the world works before spreading your ignoranceToSoft4Truth , 24 minutes ago link
Trigglypuff isn't fielding multiple VP offers? WUT?
https://i.ytimg.com/vi/8gTPc-KE8EA/hqdefault.jpgbrokebackbuck , 24 minutes ago link
There's always an opening at Escort Alligator.Richard III , 24 minutes ago link
if they want to hire me, I expect to be compensated for the ******** economy they created after bailing out too big to fail in 2008SummerSausage , 20 minutes ago link
If they can fog a mirror, the Army will take them.sticky_pickles , 26 minutes ago link
But they want someone else to fog the mirror for them.SummerSausage , 26 minutes ago link
"why join the prols when you can just control the means?"DSCH , 17 minutes ago link
Not much demand for soy boys with degrees in wymyn's rage poetry in the 4th century.Teamtc321 , 31 minutes ago link
Not much demand for Americans majoring in STEM either jackoff.sillycat , 21 minutes ago link
What should be pointed out imo, is that a major amounts of Graduates have just went thru 4-6 years of a Liberal Borg.
They are un-hire-able, brain washed, worthless air breathing parasites.
Those who have interned or worked at firms within their chosen profession, built relationship's, showed ability to perform and contribute, will be hired if not already.
Those Libtard Borg stooges will have to go back to Mom's Basement for further instruction..............SummerSausage , 19 minutes ago link
very wrong. american engineers and computer science graduates stay jobless while corps hire from india and china. look at youtube vids of google staff meetings...Teamtc321 , 17 minutes ago link
Very few graduates meet that classification.Solosides , 14 minutes ago link
Not wrong at all, I have worked with freshly graduated Mechanical and Electrical Engineers. For years they were actually put with me once per month for a full 5 days. 3 at a time usually for training.
Everything I stated above is 100 % spot on, Fact. They usually are complete idiots. Not worth having around, at all.
Snout the First , 7 minutes ago link
At my last Solidworks job I was able to run circles around the company's college trained "mechanical engineer". He eventually quit.Teamtc321 , 1 minute ago link
There is nothing more useless than a newly graduated engineer. I was useless when I graduated with my BSCHE 40+ years ago. It takes around five to ten years before an engineer is really contributing.We_The_People , 31 minutes ago link
I actually had a few but each and everyone of them grew up within family trades, or worked at a trade so they had great hands on experience way prior to going to College. Most put their way through school or contributed at similar trades to sharpen their skills.
I was very similar and was lucky to have some guide me in the correct direction at that age imo. It did help, a lot...........
enfield0916 , 32 minutes ago link
So social justice gender studies doesn't have a real job? Well No ****!!!!
These universities aren't teaching these kids ANYTHING of any use for the real world and employers know that! Within the next few years, a liberal degree in whatever will be completely useless. Enjoying payback your loans dumbasses
The next generation better be taking notes and looking at a trade for high school!???ö? , 32 minutes ago link
I have a a job for a fresh college grad. If you are cute, haven't slept with all the college athletes, have a non-land-whale decent body and can cook a meal that doesn't taste like crap.
Reply to my comment here and I have an opening for a sugar bay - aka sexy college girl wifey ;)
In return I will provide you with a free place to live, feed you, take care of you and this will be a temporary arrangement until you can prove that you won't leave me with 50% of my life savings by going to court.
Roomate prenup shall be signed electronically before you move in with me.RafterManFMJ , 33 minutes ago link
Their future on Skid Row .SummerSausage , 23 minutes ago link
But but "muh economy!"
its bestus economy ever!roy565658 , 36 minutes ago link
If you don't major in trigger warnings and require safe zones.I am Groot , 36 minutes ago link
𝐆𝐨𝐨𝐠𝐥𝐞 𝐢𝐬 𝐩𝐚𝐲𝐢𝐧𝐠 𝟗𝟕$ 𝐩𝐞𝐫 𝐡𝐨𝐮𝐫,𝐰𝐢𝐭𝐡 𝐰𝐞𝐞𝐤𝐥𝐲 𝐩𝐚𝐲𝐨𝐮𝐭𝐬.𝐘𝐨𝐮 𝐜𝐚𝐧 𝐚𝐥𝐬𝐨 𝐚𝐯𝐚𝐢𝐥 𝐭𝐡𝐢𝐬.𝐎𝐧 𝐭𝐮𝐞𝐬𝐝𝐚𝐲 𝐈 𝐠𝐨𝐭 𝐚 𝐛𝐫𝐚𝐧𝐝 𝐧𝐞𝐰 𝐋𝐚𝐧𝐝 𝐑𝐨𝐯𝐞𝐫 𝐑𝐚𝐧𝐠𝐞 𝐑𝐨𝐯𝐞𝐫 𝐟𝐫𝐨𝐦 𝐡𝐚𝐯𝐢𝐧𝐠 𝐞𝐚𝐫𝐧𝐞𝐝 $𝟏𝟏𝟕𝟓𝟐 𝐭𝐡𝐢𝐬 𝐥𝐚𝐬𝐭 𝐟𝐨𝐮𝐫 𝐰𝐞𝐞𝐤𝐬..𝐰𝐢𝐭𝐡-𝐨𝐮𝐭 𝐚𝐧𝐲 𝐝𝐨𝐮𝐛𝐭 𝐢𝐭'𝐬 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭-𝐜𝐨𝐦𝐟𝐨𝐫𝐭𝐚𝐛𝐥𝐞 𝐣𝐨𝐛 𝐈 𝐡𝐚𝐯𝐞 𝐞𝐯𝐞𝐫 𝐝𝐨𝐧𝐞 .. 𝐈𝐭 𝐒𝐨𝐮𝐧𝐝𝐬 𝐮𝐧𝐛𝐞𝐥𝐢𝐞𝐯𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐲𝐨𝐮 𝐰𝐨𝐧𝐭 𝐟𝐨𝐫𝐠𝐢𝐯𝐞 𝐲𝐨𝐮𝐫𝐬𝐞𝐥𝐟 𝐢𝐟 𝐲𝐨𝐮 𝐝𝐨𝐧'𝐭 𝐜𝐡𝐞𝐜𝐤 𝐢𝐭.
click this link════►►► http://www.worktoday33.comNoDebt , 34 minutes ago link
They don't have jobs lined up because the want ads aren't hiring 300lb, green and purple haired, nose ring wearing, transgendered justice warrior promoting, half-vegan, pedo, ***, basket weavers for their company.NoDebt , 37 minutes ago link
Wanted: Professional college protester. Low pay, but you're still on campus where it's safe.
Lt. Frank Drebin , 37 minutes ago link
I didn't either. Took the whole summer off to party. Sometime around September I started looking for a job. Not one God damned job offered for an economist (that was my major). What a rip, I thought. So I ended up where everyone else ends up- sales. It was at that job I actually got an education.
I am Groot , 35 minutes ago link
Most college grads had no buisness going to college in the first place.
Some of the dumbest people got into these colleges. Then they took out loans so they could get a job to pay off their student loan debt. Congratulations, you played yourselves.foodstampbarry , 22 minutes ago link
Most of the fucktards in college are to stupid to dig ditches.Solosides , 17 minutes ago link
Too not to. Agree with your comment though. ;)gilhgvc , 39 minutes ago link
Out of high school they would have had the ability to dig ditches. But after 4 years of liberal arts and feminism training, they aren't even capable of stringing together a coherent sentence.
How about showing WHICH majors these idiots went for and then correlate that to the jobs and salaries that are ACTUALLY available for those majors......a major in Art History WON"T FIND A JOB... .a Engineering major is ALREADY GETTING OFFERS, their junior year. QUIT WASTING MONEY ON WORTHLESS DEGREES. That alone solves EVERY problem in this article
Jun 06, 2019 | journals.sagepub.com
In this article, we explore commodities and consumption , two concepts that are central to critiques of the neoliberal university. By engaging with these concepts, we explore the limits of neoliberal logic. We ground this conceptual entanglement in Marxist and post-Marxist traditions given our understanding of neoliberalism both as an extension of and as a meaningfully different form of capitalism. As colleges and universities enact neoliberal economic assumptions by focusing on revenue generation, understanding students as customers, and construing their faculty as temporary service providers, the terms commodity and consumption have become commonplace in critical higher education literature. When critiques concerning the commodification and consumption of higher education are connected with these theoretical and conceptual foundations, they not only become more effective but also provide a more meaningful guide upon which current and future scholars can build.
Mar 08, 2009 | blogs.nytimes.com
Here is an often cited definition by Paul Treanor: "Neoliberalism is a philosophy in which the existence and operation of a market are valued in themselves, separately from any previous relationship with the production of goods and services . . . and where the operation of a market or market-like structure is seen as an ethic in itself, capable of acting as a guide for all human action, and substituting for all previously existing ethical beliefs." ("Neoliberalism: Origins, Theory, Definition.")
In a neoliberal world, for example, tort questions -- questions of negligence law -- are thought of not as ethical questions of blame and restitution (who did the injury and how can the injured party be made whole?), but as economic questions about the value to someone of an injury-producing action relative to the cost to someone else adversely affected by that same action. It may be the case that run-off from my factory kills the fish in your stream; but rather than asking the government to stop my polluting activity (which would involve the loss of jobs and the diminishing of the number of market transactions), why don't you and I sit down and figure out if more wealth is created by my factory's operations than is lost as a consequence of their effects?
As Ronald Coase put it in his classic article, "The Problem of Social Cost" (Journal of Law and Economics, 1960): "The question to be decided is: is the value of the fish lost greater or less than the value of the product which the contamination of the stream makes possible?" If the answer is more value would be lost if my factory were closed, then the principle of the maximization of wealth and efficiency directs us to a negotiated solution: you allow my factory to continue to pollute your stream and I will compensate you or underwrite the costs of your moving the stream elsewhere on your property, provided of course that the price I pay for the right to pollute is not greater than the value produced by my being permitted to continue.
Notice that "value" in this example (which is an extremely simplified stand-in for infinitely more complex transactions) is an economic, not an ethical word, or, rather, that in the neoliberal universe, ethics reduces to calculations of wealth and productivity. Notice too that if you and I proceed (as market ethics dictate) to work things out between us -- to come to a private agreement -- there will be no need for action by either the government or the courts, each of which is likely to muddy the waters (in which the fish will still be dying) by introducing distracting moral or philosophical concerns, sometimes referred to as "market distortions."
Whereas in other theories, the achieving of a better life for all requires a measure of state intervention, in the polemics of neoliberalism (elaborated by Milton Friedman and Friedrich von Hayek and put into practice by Ronald Reagan and Margaret Thatcher), state interventions -- governmental policies of social engineering -- are "presented as the problem rather than the solution" (Chris Harman, "Theorising Neoliberalism," International Socialism Journal, December 2007).
The solution is the privatization of everything (hence the slogan "let's get governments off our backs"), which would include social security, health care, K-12 education, the ownership and maintenance of toll–roads, railways, airlines, energy production, communication systems and the flow of money. (This list, far from exhaustive, should alert us to the extent to which the neoliberal agenda has already succeeded.)
The assumption is that if free enterprise is allowed to make its way into every corner of human existence, the results will be better overall for everyone, even for those who are temporarily disadvantaged, let's say by being deprived of their fish.
The objection (which I am reporting, not making) is that in the passage from a state in which actions are guided by an overarching notion of the public good to a state in which individual entrepreneurs "freely" pursue their private goods, values like morality, justice, fairness, empathy, nobility and love are either abandoned or redefined in market terms.
Short-term transactions-for-profit replace long-term planning designed to produce a more just and equitable society. Everyone is always running around doing and acquiring things, but the things done and acquired provide only momentary and empty pleasures (shopping, trophy houses, designer clothing and jewelry), which in the end amount to nothing. Neoliberalism, David Harvey explains, delivers a "world of pseudo-satisfactions that is superficially exciting but hollow at its core." ("A Brief History of Neoliberalism.")
Harvey and the other critics of neoliberalism explain that once neoliberal goals and priorities become embedded in a culture's way of thinking, institutions that don't regard themselves as neoliberal will nevertheless engage in practices that mime and extend neoliberal principles -- privatization, untrammeled competition, the retreat from social engineering, the proliferation of markets. These are exactly the principles and practices these critics find in the 21st century university, where (according to Henry Giroux) the "historical legacy" of the university conceived "as a crucial public sphere" has given way to a university "that now narrates itself in terms that are more instrumental, commercial and practical." ("Academic Unfreedom in America," in Works and Days.)
This new narrative has been produced (and necessitated) by the withdrawal of the state from the funding of its so-called public universities. If the percentage of a state's contribution to a college's operating expenses falls from 80 to 10 and less (this has been the relentless trajectory of the past 40 years) and if, at the same time, demand for the "product" of higher education rises and the cost of delivering that product (the cost of supplies, personnel, information systems, maintenance, construction, insurance, security) skyrockets, a huge gap opens up that will have to be filled somehow.
Faced with this situation universities have responded by (1) raising tuition, in effect passing the burden of costs to the students who now become consumers and debt-holders rather than beneficiaries of enlightenment (2) entering into research partnerships with industry and thus courting the danger of turning the pursuit of truth into the pursuit of profits and (3) hiring a larger and larger number of short-term, part-time adjuncts who as members of a transient and disposable workforce are in no position to challenge the university's practices or agitate for an academy more committed to the realization of democratic rather than monetary goals. In short , universities have embraced neoliberalism.
Meanwhile, even those few faculty members with security of employment do their bit for neoliberalism when they retire to their professional enclaves and churn out reams of scholarship (their equivalent of capital) that is increasingly specialized and without a clear connection to the public interest: "[F]aculty have progressively . . . favored professionalism over social responsibility and have . . . refused to take positions on controversial issues"; as a result they have "become disconnected from political agency and thereby incapable of taking a political stand" (McClennen, Works and Days).
... ... ...
Stanley Fish is a professor of humanities and law at Florida International University, in Miami. In the Fall of 2012, he will be Floersheimer Distinguished Visiting Professor at the Benjamin N. Cardozo School of Law. He has also taught at the University of California at Berkeley, Johns Hopkins, Duke University and the University of Illinois, Chicago. He is the author of 15 books, most recently “Versions of Antihumanism: Milton and Others”; “How to Write a Sentence”; “Save the World On Your Own Time”; and “The Fugitive in Flight,” a study of the 1960s TV drama. “Versions of Academic Freedom: From Professionalism to Revolution” will be published in 2014.
May 13, 2019 | peakoilbarrel.com
Ignored says: 05/07/2019 at 5:04 pm Attached are the changing monthly STEO projections for February, March and April for the lower 48 production. Today's projection, April, has added 230 kb/d day by year end 2019 to the March projection and close to 300 kb/d in 2020. The April projection also shows an increase of 960 kb/d from Dec 18 to Dec 19. For Dec 19 to Dec 20, the increase is only 420 kb/d, less than half of the 18 to 19 increase. Any speculation/ideas for the lower increase for 19 to 20. The G of M drops by 70 kb/d from Dec 19 to Dec 20.
Ron Patterson x Ignored says: 05/07/2019 at 5:37 pmThanks, Ovi.GuyM x Ignored says: 05/07/2019 at 6:27 pm
You notice that the April 19 STEO has the lowest production numbers for Jan. Feb. and April 2019 but the highest numbers as they move into the second half of 2019 and all of 2020.
I don't know what to make of this except that I find it rather amusing.I found it insulting to my intelligence (not an exceptionally difficult task), but now that you mention it, I can imagine some Lewis Carroll feel to it.
Jun 05, 2019 | www.nakedcapitalism.com
JohnnyGL , June 5, 2019 at 3:25 pm
"Most people that I have talked with about wages, say that not every job is worth $15."
Walmart's gross profit of $129bn screams otherwise.
An increase of $5/hr x 30hrs/wk x 52wks/yr = $7,800 per employee. They've got 2.2M employees. Let's say 2M of those 2.2M are in dire need of a raise.
That's a bit over $15bn a year in cost to the company. $114bn in annual profit, instead of $129bn sounds like plenty to me. How about a little shared sacrifice?
I doubt it would actually require such a big hit, because an across the board hike in wages would probably partially boomerang back into revenues for Walmart as employees and their families/dependents had more to spend in Walmart's stores.
WheresOurTeddy , June 5, 2019 at 3:47 pm
Walmart: your taxes subsidize it even if you don't shop there.
The Waltons Greed Must End
Lost of Walmart worker stories posted today on Bernie's youtube channel.
He's a political knife fighter and the only one I want up against Mitch McConnell.
todde , June 5, 2019 at 4:19 pm
Reduce eliminate the payroll tax.
Everyone gets a raise and we less small businesses will go under.
todde , June 5, 2019 at 4:24 pm
once more, in English.
Reduce or eliminate the payroll tax.
Everyone who works will get a raise and less small businesses will go under.
Pat , June 5, 2019 at 4:41 pm
No. The payroll tax is the one tax I absolutely do not want reduced as those taxes are dedicated to Social Security and Medicare.
The raise should come from the companies that strategically and callously refuse to raise wages unless forced to. In point of fact the abuse of the independent contractor position AND the increased use of unpaid interns are good examples of how wide spread the idea is that you shouldn't actually pay the labor costs involved in your business.
Yes, I do get that some small businesses have problems with payroll that are not the result of the greed of the owners. But seriously using Wal-Mart's cheap ass wages to put forth a plan that supposedly helps workers while actually harming them (as Social Security is absolutely necessary for most workers to even consider retirement even if they are physically unable to work any longer shortchanging it is most definitely not worker friendly) and leaves WalMart with even higher obscenely high profits is well .despicable.
Pat , June 5, 2019 at 4:42 pm
Oh, and just for the record a lot of those small businesses would do better with a higher minimum wage as more people would have more disposable income to make use of those small businesses. Underpaid people don't shop or use services unless they absolutely have to
todde , June 5, 2019 at 5:38 pm
for the record: all of the small business would be better off if you cut the payroll tax as more people would have more money to spend. (and businesses too, as their tax burden would go down)
Massinissa , June 5, 2019 at 6:34 pm
Small businesses would be better off But Social Security and Medicare would be gutted?
No thanks. Besides, I doubt that alone would stop the trends of small businesses becoming more and more irrelevant against the forces of monopolization. A 'magic bullet' fix like this won't be enough even if it didn't have obvious downsides. Which it does.
Todde , June 5, 2019 at 6:42 pm
I never discussed gutting anything.
Taxes, they dont fund spending.
You maybe on the wrong site if you think they do.
flaesq , June 5, 2019 at 5:03 pm
But why fund SS and Medicare regressively/flat? The money winds up in the same bucket that ought to be offset by greater amounts of progressively-incurred income taxes.
If the bucket has to be filled (but I'm not sure it does – Doesn't MMT say to some extent it doesn't, particularly when we're in what's effectively a disinflationary environment) please let it be filled in a progressive way. We can start by inverting the cap gains preferences and advantaging earned income while restoring additional tiers until we get back to the 90% marginal rates that correlated with the post-war boom times.
Pat , June 5, 2019 at 5:18 pm
In a world where the Waltons and the Bezos and the Kochs do not have the means of buying elected officials you might have a point. But we do not live in that world nor do we live in the world where MMT exists for more than the MIC and Corporate welfare.
Unless and until those two things change we cannot even consider eliminating the dedicated taxes for SS and Medicare. Even with them we are constantly faced with threats to their existence. Without them they wouldn't last past lunch.
jrs , June 5, 2019 at 5:28 pm
there are other ways to cut businesses costs like healthcare costs, but don't cut payroll taxes now or anytime soon, we don't live in the kind of world where it could work at this point. And what's so horrible about businesses paying their fair share in taxes anyway? If they can't be profitable and do that, maybe they need to close up shop.
todde , June 5, 2019 at 5:50 pm
I ate a lot of cold cereal growing up when Reagan increased the payroll tax.
And my parent's house was mortgaged to the hilt at that same time.
but hey, if me being hungry and homeless is OK with you so a business doesn't get a tax break, so be it.
Massinissa , June 5, 2019 at 6:36 pm
You'd get food but other people would go hungry due to cuts in social security and medicare which payroll taxes fund
Its not a magic bullet.
Todde , June 5, 2019 at 6:44 pm
Taxes dont fund spending.
Taxes dont fund spending
Taxes dont fund spending
todde , June 5, 2019 at 5:35 pm
Either taxes do or they don't fund government programs.
Make up your minds as to which one it is.
todde , June 5, 2019 at 5:37 pm
if there was only some theory I could cite that would explain it.
A Money Theory.
A Modern Money Theory.
Oregoncharles , June 5, 2019 at 5:47 pm
In principle, I'm opposed to payroll taxes because they penalize hiring people. The chief exception, in my mind, is directly employment-related programs – like Social Security, but not Medicare so much. There is also a small unemployment tax, at least in Oregon.
A basic principle is to tax things you want less of, not things you want more of. A partial exception is income taxes or profit taxes, because they're supposed to be fairly neutral and not influence economic decisions. People are unlikely to want less income because it's taxed.
This is a long-running issue here, because proposals for state-level Medicare4All tend to rely on a payroll tax. Health is only very partly employment-related; we already have decent Workmen's Comp system (state operated). Either that or a sales tax, a certain deal killer in Oregon – the whole thing has to get past the voters. I advocate a dedicated surtax on the business and income taxes. Corporate taxes are much too low in Oregon.
He's right about small businesses, which I once had (now it's even smaller). Payroll taxes are a significant burden, in part just for the accountants. It's easier for large businesses to absorb, so gives them an advantage. Not good.
People on the left tend to see payroll taxes as a free lunch of sorts; they're actually quite costly.
Todde , June 5, 2019 at 6:54 pm
Amazing how the regressive tax seems to be the only one we cant cut.
No matter what your political affiliation.
Or even if you believe in MMT
jrs , June 5, 2019 at 7:06 pm
Because it's the one that allows people to claim they earned SS and Medicare, whether it's true or not, it's a powerful argument.
Employers want to get rid of it, well if it comes down to them or workers, I don't prioritize them. These same employers complain about raising the minimum wage. I prioritize workers, and whether they can survive the present and retirement (already iffy of course).
Jun 05, 2019 | www.nakedcapitalism.com
djrichard , June 5, 2019 at 6:32 pm
I just assume the 10Y yield is reverting to trend – the trend downward it has had since 1982. The counter trend move upward in 2018 assumed the fiscal spigots were going to be turned on, that the deficit was no longer a dirty word and therefore inflation was no longer a dirty word. It's just taken til now to capitulate that none of that's going to happen.
Seems the Federal Reserve was caught by surprise by this too. Otherwise I don't think they would have raised their Fed Funds rate to where it is. Because now that the 10Y yield has capitulated, it's actually lower than the Fed Funds rate, creating an inverted yield curve. Which is unusual because normally an inverted yield curve is created on purpose by the Federal Reserve – they raise their rate above the 10Y yield rather than wait for the 10Y yield to drop below their rate. Still, every good trader knows an inverted yield curve is bad juju. So what's the Fed Reserve to do? Sit on its hands and let the inverted yield curve work its magic and create a recession?
Seems to me that the Federal Reserve doesn't want the market to crash on Trump's watch. At least not until after the 2020 election. So the Fed Reserve is signaling to the traders, "we feel your pain", they'll lower their rate to bring it back below the 10Y yield. They just need a pretext on why they're doing so, something that doesn't simply smack of the Fed Reserve propping up the stock market. "It's the PMI, it's the employment report, it's trade, it's one of those, yeah that's the ticket."
Anyways, even if the fiscal spigots get turned on, I don't see the 10Y yield reversing trend until spiraling wage inflation is a thing again. I.e. when people aren't worried about their exposure to inflating prices as long as their wages are increasing / tracking with inflation. Making it safe for them to take on debt at increasing interest rates – i.e. generating inflation. And I don't see that happening anytime soon unless there's some kind of JG program.
Until then, the trend line of the 10Y yield is downwards. Giving the Federal Reserve less and less room for their Fed Funds rate to operate in without inverting the yield curve. Seems like that won't be able to continue at some point. Interesting years ahead.
Jun 05, 2019 | www.zerohedge.com
venturen , 2 hours ago linkventuren , 3 hours ago link
finance...is not value added....it is value SUBTRACTED!Handful of Dust , 2 hours ago link
when you can create $10 Trillion out of thin air and then give it to a select few...what did you think would happen. Instead of arresting the criminal bankers....we rescued them!
They are criminal by nature and are programmed to steal ever more! I know hundreds of NYC bankers and lawyers.....they are NOT NICE PEOPLE!CatInTheHat , 2 hours ago link
Between Bush and Obama bailing them out, and then destroying the middle class with regulations, Obamacare, ZIRP, offshoring, etc.....exlcus , 2 hours ago link
...Narcissists/sociopaths in America now outnumber empathsCatInTheHat , 2 hours ago link
America's Demise In One Simple Chart
This is one time that a ZH headline was not click bait. Not only is FIRE bigger than manufacturing, even .GOV is bigger than manufacturing now too. We're fucked, big time.RasinResin , 1 hour ago link
Another boomer who lives in a state of alternate reality. Boomers were privy to government jobs and manufacturing in the US aplenty. They also were privy to government subsidies that don't exist today.
A job at McDonald's then was merely a job you had to make a little money on the side while attending colleges that were FREE to very low cost. Now, McDonald's is one of many low wage jobs in this GIG economy that are utilized as life sustaining.
Offshoring, the disappearance of government subsidies and social programs (thanks to boomers love for BILL CLINTON), wealth inequality (See the FED/Obama bank bailout/QE), stagnant wages, student loan debt, 22 TRILLION US DEBT, & 9/11 & 17 years of WAR & MORE WAR, has caused this country to become BANKRUPT.
Living in your parents basement, or with roommates, one paycheck from the streets to living on the streets is how it is for that kid YOU destroyed through your voting for sociopaths who took away the very jobs and entitlements YOU were privy to that no longer exist.Handful of Dust , 1 minute ago link
I like your sarcasm, but the truth is something different entirely. Median home in 2000 - 164K. Now - 313K. Median income during the same period rose 3k. Clarified.Expat , 3 hours ago link
If interest rates ever correct, those houses will be $164k again.j0nx , 1 hour ago link
LOL. All hail Donald! Our Real Estate Over-Lord and King of Low Interest Rates!
... ... ...yogibear , 1 hour ago link
Bs. If they feared that then they wouldn't have ever raised rates effectively killing the refi market and putting downward pressure on prices for the past 2 years.desirdavenir , 1 hour ago link
Production of debt instead of production of things. US is one of the largest producers of debt. Financialization as planned by the bankers.CatInTheHat , 27 minutes ago link
Financialization as embraced by the boomers, eager to go for the fast money with no skills and no hard work.besnook , 1 hour ago link
Yeah it is. I wouldn't have a kid and raise it in this country today if my life depended on it. May be that's why birth rates in the US are at historic lows.wonger , 1 hour ago link
if the country was run by shoe shine boys there would be shoe shine palaces on every corner and a law requiring everyone to get a shoeshine 3 times/day. the usa is run by banksters. you get the result described.HideTheWeenie , 1 hour ago link
ADP just missed by 153,000 jobs, bye bye real estateBuyDash , 3 hours ago link
Real Estate:They're mot making more of it ... Because they made too much of it.Teja , 1 hour ago link
It happened in the blink of an eye. I told you, soon Caucasian areas will just start dying out. Not with a bang, but with a whimper.TeethVillage88s , 1 hour ago link
Curse of consumerist car-focussed societies everywhere. Same for Japan, China. Don't think that skin pigments will protect against it, though.
The only counter-trends are societies like the Amish, or maybe orthodox Jews. Their inoculation against most aspects of consumer society has the side effect of exponential population growth.
Via Global Macro Monitor,
We originally posted this chart in February 2011 , which we just updated also breaking out the real estate industry from FIRE (finance, insurance, and real estate). It is still just as shocking as it was back when we first produced it.
Economy Jumps The Shark. The U.S. economy jumped the shark in 1990 when FIRE overtook the manufacturing sector in terms of its contribution to GDP.
So... Finance Capitalism is real, Mises?
May 31, 2019 | www.moonofalabama.org
Victor , May 30, 2019 3:12:19 PM | 10
US energy department rebrands fossil fuels as 'molecules of freedom'...and this is in The Guardian and not The Onion: