FedUpUSA

Archive for the ‘education’ Category

Seriously folks, this is what I see every day among young people.  It’s pervasive and if it doesn’t stop we are finished as a nation.

To the kids who believe this, let me make reality perfectly clear to you: You’re fucked, as government by definition can only take from one person and give to someone else. 

Therefore what you believe is mathematically impossible.

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Students stuck with gargantuan loans for life are bound in a bank-dominated “improvement” of indentured servitude.

Yesterday (Risk is Necessary for Adaptation, Innovation and Success)I discussed the inevitable failure of systems in which risk has been transferred from those who reap the gain to others. In the case of student loans, the risk has been transferred to students who enter decades of indentured servitude.

Indentured servitude has a long history in the U.S.; many immigrants accepted servitude of between two and seven years in exchange for passage to the New World.  Orphans were indentured out of orphanages to the age of 21–potentially a much longer servitude. Indeed, the labor of anyone on the public dole could be auctioned off:

From Wilma A. Dunaway’s Online Archive:

By the time of the Revolutionary War, indentured servitude had been a common practice in the United States for 150 years.Following British laws established during the colonial period, post-Revolutionary public  authorities indentured the labor of those who were likely to fall upon the public dole.  Appalachian county governments bound out indigent adults and children whose families could  no longer care for them. The age, gender, and racial trends are clearly documented in early  records of Appalachian poor houses, for women and orphans represented more than two-thirds of the individuals whose labor was auctioned off by county governments.

Isaac Miller of Anderson County, Tennessee, advertised in 1819 for the return of Margaret Hutcheson who had been bound to him by the county poor house. Obviously, the  seventeen-year-old girl had tried the patience of her master, for he offered only  “a reward of 6 1/4 cents to the person who w[ould] deliver her to [him],” caustically adding, “but I will not thank any person for doing so.”

When an orphan was bound out by the county poor house, the child was legally tied to the master until the age of eighteen or twenty-one.

Orphans were often bound to tradesmen or farmers until age 21, and indigent adults were typically bound for three to seven years. However, there is no way to document how many laborers were bound out by their own families. When parents indentured their own children, it was for “a usual term of seven years if a girl, or five if a boy.”

Let us consider the modern form of indentured servitude, student loans, which now exceed a staggering $1 Trillion: “It’s Going To Create A  Generation Of Wage Slavery” (Zero Hedge), or perhaps more accurately, indentured servitude, because the debt cannot be dismissed via bankruptcy.

Student loans outstanding will exceed $1 trillion this year(USA Today):

Lenders have little risk of losing money on the loans, unlike mortgages made during the real estate bubble. Congress has given the lenders, the government included, broad collection  powers, far greater than those of mortgage or credit card lenders. The debt can’t be shed  in bankruptcy.The credit risk falls on young people who will start adult life deeper in debt, a burden that could place a drag on the economy in the future.

“Students who borrow too much end up delaying life-cycle events such as buying a car,  buying a home, getting married (and) having children,” says Mark Kantrowitz, publisher  of FinAid.org.

“It’s going to create a generation of wage slavery,” says Nick Pardini, a Villanova  University graduate student in finance who has warned on a blog for investors that student loans are the next credit bubble — with borrowers, rather than lenders, as the losers.

The University of Phoenix, the nation’s largest, got 88% of its revenue from federal  programs last year, most of it from student loans.

In effect, students getA Mortgage with Every College Graduation (Dr. Housing Bubble,  via Jed H.) with one key difference: there is no way to get out from underneath the student loans.

This is the perfection of indentured servitude. How many students pay off their $100,000 loans in a mere seven years?Modern banks and corporate “higher education” diploma mills have improved the old system of indentured servitude, extending the servitude  from seven years to decades.

The key dynamic here is the transference of risk from the lenders, who stand to reap immense profits from these loans, to the students.This transference is enforced of course not by the banks but by their partner, the Savior State, which obliterated the right to bankruptcy for students while guaranteeing profits to the banks via Sallie Mae, another guarantor of private profits backstopped by taxpayers.

The feedback between risk and return has been severed.Lenders can extend massive loans to marginal students attending for-profit colleges, knowing their losses  will be backstopped while the gains are theirs to keep, and the debt-serf students are indentured for life.

Imagine if risk were connected to gain.Maybe lenders would be a bit more careful about which students they deemed worthy credit risks; perhaps they would begin differentiating between low-market-value liberal arts degrees from hard-science degrees.

Maybe they’d start considering the students’ incomes while in university. Maybe they’d recognize differences in risk between for-profit diploma mills protected by the  rapacious, captured-by-corporations Savior State and state universities.

There can be no “fix” to our decline until risk is bound once again to return and gain. If risk is transferred to others, you’re left with some type of indentured servitude and financial tyranny in service of the banks and their Savior State toadies.

Charles Hugh Smith – Of Two Minds

Once again, with feeling (’cause that’s all they got!)

Asking the wealthiest among us to pay more, and taking new steps to help the least well-off — the jobless and the poor — are good policy. But politically, and perhaps even economically, the president can’t lose focus on a group often left on the sidelines of the political conflict over rich and poor: the long-suffering middle class.

So why aren’t we talking about trade policy?  The fact that while we keep arguing that “Free Trade” is a good thing, every time we open our borders to more free trade we get a larger trade deficit and more middle-class jobs go overseas?

The writer laments school funding, but that’s a common lefty liberal load of crap:

If the news on incomes wasn’t bad enough, the middle class was dealt a second blow last week when a report by the Washington research organization Third Way showed that schools serving this segment of the population have vastly under- delivered for their students. (Disclosure: I am a member of the board of trustees of Third Way, though I didn’t participate in preparing the report.)

No one should be surprised by Third Way’s finding that, compared with schools in the wealthiest districts, those serving middle-class families spend about $1,600 less per student, have three more students per teacher, and pay teachers $6,000 less per year.

Money has basically nothing to do with educational outcomes.  What we’ve done in this nation is a crime when it comes to our schools – moving away from phonics to “whole language”, dumbing down the math curriculum and removing direct instruction everywhere it can be removed and allowing disruptive students and those who simply are outside the bell curve’s second standard deviation to remain in the common classroom, then insisting that they not be “behind”, thereby dumbing down the curriculum and progress for everyone else.

None of this is an accident and none of it has anything to do with money.  In fact, mathematics, history, English and the other basics of learning haven’t changed in a hundred years.  There is no need for “new” textbooks or any sort of technology beyond pencils, paper, a chalk board and flash cards in the first two or three grades!

The rest of the article talks about the “workers of tomorrow”, yet the image at the top is that of a blue-collar worker – the very person who we have done our damndest to outsource to China.

The facts are this: We do not need a lot of rocket scientists.  Oh sure, we need some, just as we need some engineers, doctors, physicists and computer programmers.

But we also need lots of people who work with their hands and we must have an economy that favors producing things.  Outsourcing the building of things to places where labor is $5/day does not produce a strong middle class.  The fact of the matter is that whether we like it or not intelligence is a bell curve and the average is 100.  The average person is not the award-winning rocket scientists of tomorrow, nor the innovator in high-tech design.  That’s the guy or gal who’s two, three, or even four standard deviations beyond “normal” intelligence.

All economies need those people, but those people are not the norm.  The norm is the guy or gal who builds cars, nails on roofs, repairs plumbing and fixes your AC when it breaks.  He or she needs a trade making and maintaining things, and those things need to be produced here.

Pull your head out of your ass America.  We can neither send everyone to college to be a rocket scientists nor should we.  The majority of people are in fact average – that’s what average means.  The brightest and best should indeed be given every opportunity to excel, but for everyone else we need an economy that provides real work that rewards them for their ability and effort, and provides a path forward for those individuals.

It can’t be done when the manufacturing and other goods-producing jobs are in China and the options for a job here are to be a Doctor or pull coffees at Starbucks.

What we have here is clearly a lack of understanding.  You see, the Constitution LIMITS the powers of government, it doesn’t expand them.  For some odd reason, Congress seems to believe the latter.  It’s time to remind them that the full extent of their powers are contained in a document that doesn’t even fill 35 three-inch by 6-inch pages.

We know our Congressfolk use The Constitution for toilet paper these days.  From Obamacare to the Department of Education kicking down doors on “no-knock” warrants to TSA rapescans and other forms of sexual molestation, The Constitution, Declaration and of course The Bill of Rights have been so widely disregarded as to become somewhat of a bad joke.

It’s time, coming into silly season, to put a stop to this.

Whether you’re a Democrat or Republican, this is a movement you should be able to get behind.  The message is simple:  Send your Critters A Constitution.

First, order them.  I recommend http://www.nccs.net, although you can also obtain nicely printed pocket-sized copies from The Heritage Foundation and other places.  They’re cheap; 100 of them are just $30, or 10 for $7.50, or one for free – just send a SASE to them.

Second, go to http://www.house.gov and http://www.senate.gov and get the correct mailing addresses for your Representative and Senators.  Address up some envelopes.

Enclose a letter with it.  Feel free to steal the text of what’s below, modified to suit.

The Honorable <First, Last>
xxxx {Name} {House|Senate} Office Building
Washington DC  {Zip}

Dear {Mr.|Ms.} <Last>;

Please find enclosed a copy of the Declaration of Independence, The United States Constitution, and the Bill of Rights.

When you assumed your office in Washington DC, you took an oath to uphold and defend The Constitution of the United States as black letter law against all enemies, foreign and domestic.  These are not “living” documents, subject to alteration at whim, theories or ideas.  They are, indeed, black-letter law and backed by the two seminal works in guidance on their interpretation found in The Federalist and The Anti-Federalist, much as the intent of legislation is backed by the record of debate in Congress, subject to alteration only through the amendment processes provided within.

Sadly, many Americans, myself included, are of the opinion that our alleged representatives in Washington, along with other elected and appointed officials, have forgotten their oath.  This letter is intended to remind you of the terms of the oath you swore and provide a handy pocket reference should you have questions as to your duties in this regard.

Whether you are a Democrat, Republican, Independent or otherwise is immaterial. Nor does it matter whether you consider your political philosophy Conservative, Liberal, Progressive or even Socialist.  You were elected to your office to represent your Constituents within the boundaries of the oath you swore, and that oath committed you to a duty to uphold and defend The Constitution, irrespective of your personal or political beliefs and ideals.

I, and others also sending copies of these documents, believe that a reminder of your oath and duty in this regard is in order at this time.  Please accept this gift, and be advised that I, along with others, are paying close attention to both your words and deeds, and we will not return you to your elected office in the upcoming election cycle if you are unable or unwilling to take your oath seriously, irrespective of your party affiliation or excuse for not having done so.

Thank you for your time in reviewing the documents that underlie the foundation of our nation, and may they guide you appropriately in your legislative activity.

Sincerely;

Stephanie Jasky

Time your sending of these Constitutions and their respective letters to arrive on June 22nd for maximum impact, as that’s the day I and others, including the fine folks at the Market-Ticker, have chosen.

Let’s pepper Washington with the very documents that they damn well ought to be paying attention to each and every day, testing their intentions and legislation against the foundational law against which all such activity must pass.

You can join in our discussions on the Forum here, here and here, if you’d like to coordinate efforts.  We also have a number of Constitutions to give away.  Our Forum does require registration to post.

The Great Recession is revealing some fundamental challenges in our economy.  One of those challenges revolves around the exceedingly expensive college degree and its ability to translate into employment.  As a percent many more American’s have a bachelor’s degree today than say in 1992 yet unemployment for college educated Americans is at modern record highs.  Another profound challenge facing American families is retirement savings (or lack thereof which is more likely the case).  Retirement is largely becoming a luxury that only a handful of families can count on.  As we look back at the last decade not all global stock markets were created equal and this is evident when we compare the US stock market to those abroad.  Finally we will examine what areas are seeing major price increases all the while overall inflation appears to be muted to average Americans.

College educated rise but less employment

Source:  BLS

In 1992 27 percent of those employed and 25 years of age or older had a bachelor’s degree or higher.  Today that figure is up to 36 percent.  However back in 1992 during another recessionary time those with bachelor’s degrees or higher had an unemployment rate of 3.5 percent while today it is up inching closer to 5.5 percent.

“In other words as a nation our employed workforce is more educated but it is also having a harder time gaining or maintaining employment.  At the same time college costs have far outpaced the overall inflation rate.”

This may seem counterintuitive because in terms of career aspiration a college degree is less likely today to secure you a job compared to 1992 but it is much more expensive in real terms.  So what are you really paying for?  Of course college is not merely a means to a job but a place where students develop into well rounded citizens.  Yet many for-profit institutions sell themselves as job factories and are all the willing to take federal financial aid without any statistics to back up their career placement rates.

What has occurred is a bubble in higher education.  Obviously becoming an educated citizen is important.  However we are facing a stratified market.  You have private institutions charging $50,000 a year or more catering to many of the financially well off in the country.  This group continues to get a solid education.  Next you have a public education system with very good schools but competition for admission is getting exponentially harder and students are dealing with bigger classes and more expensive tuition.  Finally you have the for-profit sector that merely operates to generate revenues by sucking in federal financial aid and not being accountable to their students and many operating only one step above diploma mills.

Retirement accounts largely a concern for top households

A BLS report done a few years ago showed that the median amount in retirement accounts for Americans was $2,000.  This makes sense given that half of Americans make $25,000 a year or less.  Many are looking at Social Security as their retirement account.  If you look at where the money is aggregated you will start to realize that retirement accounts are largely becoming a luxury for a small fragment of American society:

Keep in mind that only 15 percent of US households make more than $100,000 or more a year.  However 64 percent of all retirement assets are in the hands of the top 15 percent.  The median household income in the US is $50,000.  So we can even average out this amount here:

$1.04 trillion / 55 million US households =     $18,909

Now this may seem higher than the BLS figures but keep in mind this is because of the $20,000 to $49,999 cohort that holds the bulk of this amount.  In reality 1 out of 3 Americans have zero in savings.  Even here the data is skewed.  But think about the $18,909.  How long would that last you in retirement?  Say you draw down $1,000 per month and you are out of money within 18 months.

For many saving for retirement has become a harder and more trying exercise.  If we look at the domestic stock market we can see why.

Global stock market growth

Even after the amazing 90 percent stock market recovery from the 2009 lows the S&P 500 is still off by 11 percent from where it was in January of 2000.  In other words someone investing in boring and plain bank CDs actually performed better than the overall stock market for the decade.  The Wall Street mystique has been lost on many.  60 Minutes featured a story of a famed gambler that made millions betting on sports yet was taken for a ride with Wall Street.  In his own words, he did not trust Wall Street.  This coming from a professional gambler and hustler.  Wall Street has largely become one giant casino.

What is fascinating is markets that have benefitted from outsourcing such as India and China have boomed exponentially.  In exchange for cheap goods many Americans are now struggling to keep a hold on to what they once thought of as the middle class.  Why would a global multinational corporation want to pay someone in the US $10 an hour when they can pay someone overseas $10 per day for the same work?  That is the profound question many now have to wrestle with and no politician is willing to tackle.

Inflation is where?

The BLS CPI has shown virtually no movement over the last few years.  Much of this is due to the bursting of the housing market.  The BLS heavily weights housing as it should.  Most Americans spend the most on their housing costs each month.  Yet the housing crash has hidden some major inflation in certain items.  For example, oil is back up and you need only look at gas prices.  For those who shop the cost of food items has gone up last year.  Yet retailers have gotten creative with packaging so prices stay the same yet the amount you are receiving has gone down.

Take a look at the price of coffee, wheat, soybeans, orange juice, and other items over the last year.  The S&P 500 went up by 13.6 percent but this pales in comparison to other sectors.

What can we conclude from the above?  It is safe to say that there is a bubble in higher education.  The costs are outstripping the benefits in many cases depending on what schools you go to.  This is similar to the housing bubble.  Some homes should have never tripled in value yet many homes are nice and built with quality in good areas.  Others are not but when banks get involved you are likely to find speculation and gambling inflating costs.  Students need to be extremely careful in choosing their institution and not falling into too much debt.  Another conclusion you can draw is that the housing bust has hidden the inflation of many daily items.  The CPI is muted because of the implosion of the housing market and this covers up rising costs in other sectors.  For example college tuition, healthcare, gas, and food have all gone up significantly over the decade yet this hardly shows up while wages have gone stagnant or declined.  Ultimately American families have to be cognizant of these changes since they will impact their daily lives.

My Budget360

President Obama Asked To Fund Wiis For Schools

Posted by Karl Denninger