Sunday, April 28, 2013

Loan-Sharking Students

Succeeding Professional Protection Rackets.

Elsewhere, Anonymous writes:
Why should we feel sorry for people who can't pay their student loans? If you borrowed a lot of money to pay for a degree you were wagering that your education would land you a good job and make all the loans worth it. If things didn't turn out the way you hoped, then guess what, you rolled the dice and lost. If you welch on your bet then it's time to call in Tony Soprano.
Fair wagers depend on an accurate understanding of the variables involved in the game. If someone has stacked the deck or has X-ray vision, the poker is no longer fair, but instead a ruse designed to conceal the theft of money from other players. Like the biggest, dirtiest team of carnies ever, modern elites manage "economies" in order to produce games that look fair, but aren't. They do this, in part, by lying about the size of the available pot, lying about the players, and lying about failsafes. This works particularly well when they control all major aspects of the economy they're gaming.

Fair Wagers

We're at the County Fair. The land is leased from the government (often at a sweetheart deal, but let's not focus on that part now). You walk in the gate and are immediately confronted by hundreds of "independent operators," running different kinds of rides, games, food services, petting zoos, trinket shops, et cetera. When you go up to the basketball game, to shoot at the ridiculously tiny hoop, the setting is designed to appear like real basketball for a reason: the image of the hoop suggests "regulation basketball hoop," but in fact, the hoop is smaller. ("Everybody knows" that the fair games are rigged, except for each new generation of marks, who innocently believe it's about having fun and exhibiting skill.)

So, the basketball game is a ruse. People are unlikely to win many prizes. That's relatively easy to see, but a bigger picture is the fair itself. The basketball game, and its current operator, are but tiny parts of a whole. "The fair" is based on thousands of interconnected falsities about skill and value, and the "basketball game" is only one of them. Its entire structure is set up to facilitate overwhelming people with sensation, make them feel small, and encourage them to get tricked out of their money. Cons walk around with huge, nice prizes, pretending to have won them just the same way you could; cons demonstrate how easy their friends' games are; countless hidden messages suggest measuring worth based on your relative success at the game. Even when you "win" the prizes by out-gaming the game, you often find out that victory is measured by an arcane ticket-based currency system that results in you getting shafted even after you've gotten shafted the first several times, and you walk away with a consolation fuzzy rather than the giganormous cuddle-bear.

Many people learn to treat the fair as spectacle. Because it is loud, filled with people, and has a lot of stuff to keep you occupied, they go expecting only to see a bunch of stuff, rather than to win games, enjoy high quality art or cuisine, or otherwise enrich their lives. That's where an even bigger picture--of the society that would make a costly, relatively toxic venue a positive spectacle--can be analyzed, but we'll break off and stick inside the fair for now.

If you know the fair, it's easy to laugh this off. Of course everyone knows the fair is rigged. You go there just for stupid fun, right? The food is all the same recirculated dough and frozen mechanically separated meat, regardless of whether you're at the Chinese booth, pizza booth, or the dessert booth. The games are all bullshit, but they pass the time, so you do them just to laugh at each others' failures. You drop fifty bucks, get a few knock-off beers, and go home.

It's all really funny when you're in the know. What's not so funny is if you're among the fair's prime targets: younger people; the elderly; tourists; the mentally-disabled. No, not joking. Rowdy thirty-something yuppies pretending to slum at the fair do indeed lose a lot of money there, but little kids who actually think of it as a test of skill--because they haven't yet learned better--or special needs individuals "getting some time outside," may pay a heavy price for the spectacle. If a middle school kid gets cheated out of her twenty dollar birthday present because she was sure she could make a few free throws, the bastard who set the operation up is little better than a mugger. Those "Nigerian gold" e-mail scams were so stupidly funny, right? But when someone's Grandma lost a hundred thousand dollars and got evicted from her home, is it still funny? Should we join the liars and thieves in mocking the people who, because of life circumstance, actually believed the story?

Houses

In the Dubya-era housing bubble, we saw a good example of the elites' super-fair. Like the operators of individual shoot-a-basket win-a-prize stands, thousands of mortgage brokers farted into their task chairs, scratching the backs of their hairy necks and trying to grab commissions. They weren't even aware, like low-level carnies, that they were part of a system--they just thought they were trying to get a paycheck by making things work however they could.

At the same time, though, a coordinated effort swept the entire country: nearly every major and minor lender relaxed loaning standards so as to disregard collateral and ability-to-pay requirements. They were all on the same page, almost as if their boards of directors were staffed by the same families. And, at the same time, the corporate media flooded the country with the message GET A MORTGAGE AND BUY A HOUSE. Publishers picked up on it: newspapers, drugstore magazines, glossy yuppie magazines, and internet sites hit the world with a battery of articles about the virtues and savings of home ownership v. renting. Books came out on how you could retire earlier by owning your home instead of giving the profit to a landlord. Credit counseling services picked up at the same time, helping people inflate their credit scores. Community colleges taught classes on personal finance, and how to qualify for separate down payment assistance. Printers printed hundreds of thousands of giant placards showing happy couples moving into their first home, which were licensed to different banks for display in their lobbies. Models posed for the pictures. Photographers took the pictures. Warehouses stocked the placards, and trucking companies shipped them across the country. (The I.R.S. continued subsidizing private bank loans by redirecting taxpayer funds to allow mortgage interest deductions, as opposed to renter's deductions, and continued subsidizing private banking operations entirely by funding the FDIC.)

All at once. The "bubble" was, like all bubbles, created on purpose. It could not have been a bubble without the coordinated effort of so many seemingly disparate aspects of the economy acting in unison. The market evolved under malevolent, greedy direction, creating a demand for a product, filling that demand, extending ridiculous credit, then sparking an internal "crash" that resulted in an incredible bailout profit in the form of hundreds of billions in direct cash and hundreds of billions more in taxpayer-funded sheriff seizures. All at once, it came, just like the bumper cars setting up next to the cotton candy machine next to the shoot-a-basket game.

Students

If some high school state basketball champion kid spends $18 trying to shoot 9 baskets, misses all the shots, then climbs up the machine to discover it's not a real hoop, should we laugh at his anger? What if it's his first time at the fair? What if it wasn't $18, but $180,000, and the rest of his life will be lived under the shadow of the money that he was conned out of?

That same coordination of cons happened with student loans. Over the course of decades, bankers, politicians, and university administrators worked with the corporate media to create the illusion that careers could be purchased through "education" and "hard work." Corporations established ridiculous employment standards, like requiring a Bachelor of Arts degree for retail management positions, while universities fabricated equally ridiculous programs of study in return, like "Hotel & Restaurant Management" degrees, "Management Information Systems" courses of study, and "Business" majors. Trillions of taxpayer dollars were spent by the government encouraging multiple generations of students to get year after year after year after decade of post-K-12 education. Endless studies were commissioned, and squealingly released by the corporate media--in serious, hardbound tomes; in glossy young-adult magazines; in children's cartoons and teen dramas--promising bright futures to college graduates.

At the same time, lenders relaxed grade- and institution-standards, ensuring that droves of students would take out massive loans that they wouldn't have the ability to later repay, even as year after year from the 1970s showed real income dropping, the demand for skilled jobs dropping, and the correlation between education and career become more and more distant. Time and Newsweek churned out still more bar-graphs showing how people with more years of education made higher salaries, and websites compared "top earning professions" and "top earning majors," constantly and un-subtly linking even more education loans with even greater success later in life.

At the same time, politicians made the con better. Bankruptcy laws were altered nationwide, preventing jobless students from eliminating their debt, thereby underwriting lenders. Political speeches touted the virtues of education, and spoke gravely and condescendingly about the uneducated. The government reduced, or stopped entirely, the handing out of direct education grants (money) to students, and instead began subsidizing student loans (giving taxpayer cash directly to bankers).

Fictional movies, books, and television programs celebrated, for decades, college, as a wild and happy, yet moving and ultimately rewarding place: a phase of life through which every real person needed to pass. "Feminist" and "civil rights" movements began demeaning women and minorities who didn't spend money on college and enter college-related careers as oppressed or ignorant. Grumpy senior citizens began complaining about how younger people were trying to be "professional students," and were resoundingly mocked as "stupid" and "old-fashioned" by neo-liberal commentators.

Just as in the housing situation, these things would not have happened but for the initial lying. Without the sirens' whispers of "careers," kids would've looked for jobs and lives right out of high school, instead of being made to feel stupid if they didn't blow fifty grand on a four-year, liberal-arts education at state college, or a couple hundred grand running through graduate school afterward.

It was a symphony.

At The Fair

So, her loan was a ruse. People are unlikely to win many careers. That's relatively easy to see, but a bigger picture is the fair itself. The guy at Second Bank of Southern Arkansas, and the woman at the bursar's office, are but tiny parts of a whole. "The fair" is based on thousands of interconnected falsities about skill and value, and the "bachelor's degree" is only one of them. Its entire structure is set up to facilitate overwhelming people with sensation, make them feel small, and encourage them to get tricked out of their money. Cons walk around with huge, nice careers, pretending to have won them just the same way you could; cons demonstrate how easy their friends' games are; countless hidden messages suggest measuring worth based on your relative success at the game. Even when you "win" a career by out-gaming the game, you often find out that victory is measured by an arcane ticket-based currency system that results in you getting shafted even after you've gotten shafted the first several times, and you walk away with a consolation fuzzy rather than a pension and a place in the world.

12 comments:

  1. So in the end it's just like a Casino, only without the "Gambling Hotline" disclaimers.

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  2. Hi, this is the author of the anonymous comment that inspired this little rant. I think High Arka overstated her case a bit. A quick google search shows that median salaries for practicing attorneys mid-career are well into the six figures. Of course law schools produce many more JDs than there are jobs for lawyers. The figure I've heard is that one law school grad in three doesn't end up getting a job in the field. Years ago I decided not to go to law school because I didn't like those odds. Other people went and some have prospered. Others have been buried under a mountain of student loan debt that they have no way to pay off. Sometimes you get the bear, sometimes the bear gets you.

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    Replies
    1. This was mostly about BAs, although it certainly applies to professional and graduate degrees (other than drug sales and weapons design). Do you feel that the problem is better or worse as to law school and their respective loans/prospects/honesty?

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    2. I think it's about the same. In both cases college pays off big for some people, for others not so much. It all depends on who you are and what you do while you're there. I remember my time as an undergrad as 4 years of my life I will never get back. Other people have done better.

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  3. High Arka is my hero. I have been trying to figure out how to explain this for years and you have done it perfectly here. Thank you!!

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  4. I am amazed that the scam continues to go strong. Even the most cursory understanding of the capitalist economy is bound to make it blatantly clear that it must relentlessly *decrease* the number of skilled jobs. That's what technological innovation does: create a very, very small number of more sophisticated jobs, while decrease the skill requirements for all other jobs.

    This is not to say that education does not have intrinsic value. It does, and thus needs to be publicly funded and made available for free to anyone who has the inclination and ability.

    This will not happen soon. Unlike the housing bubble, which was merely consumer expenditure, in the case of education, people MUST pursue it - not because it directly helps their career chances, but because they are completely screwed if they do not. It's basically an arms race against the fellow fair-goers.

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    Replies
    1. Most 18 and 19 year olds know that the sales pitches from military recruiters about how great military service is shouldn't be accepted at face value. Why do you think they are so gullible when it comes to sales pitches from financial aid officers about student loans being a good idea?

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    2. How to you know that? I'm 35, hate the military, yet the army posters (and TV ads) still give ma goosebumps and make me wanna enlist and kick some evildoer ass?

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    3. Yeah, and if you're a poor 18-year-old kid who can't afford college, whose parent(s) are eager for you to get the hell out, and who has no job prospects beyond McDonalds or dealing drugs, those pitches sound downright irresistable. Add a family member who served without dying and it becomes a message from on high. Throw in a pregnant girlfriend and it becomes "I got no other choice."

      If it were otherwise, we wouldn't be able to wield a draft-free armed forces.

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  5. Yeah, most 18 year old army recruits have a pretty good idea what they are getting into. Yet, judging by the number of 20 somethings w/ student loans they can't pay, the same does not seem to be true of 18 year old college freshman. Why do you think that is?

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    Replies
    1. Actually, a lot of army recruits think they have a good idea of what they're getting into, because they've played Splinter Cell and watched a few movies. The actual feeling of sleeping twenty hours for two weeks, living on stimpills and MREs, and shooting Iraqi families out of terror, is different enough, though, to leave many of them shaking wrecks who commit suicide, shoot up the neighborhood, or drink their way into an early grave. It's fair to say that we're screwing almost all young people, not just "college students" or "military recruits."

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  6. Blessed nonvirgin Mary, yes! Yes, yes, yes!

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