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Protester’s New Front: Student Loan Debt

23 Apr

Alexander Zaitchik, writing in Salon:

A year ago, the student debt crisis was a quiet one. Default-triggered cascades of compounding interest and collection fees were matters of lonely shame and anxiety. Journalists writing on the issue networked through friends and family to find subjects willing to go on record. Then the debt-confession signs started popping up at OWS protests, and stories of debilitating student debt were everywhere. Numbers that had been a source of private depression became symbols of generational defiance. “I have $80,000 in student loan debt,” declared a typical sign. “How can I ever hope to repay that now?” Others demonstrated the vertiginous arithmetic of the classic default spiral: “Borrowed $26,000. Paid back to date $32,000. Still owe $45,000.”

There’s no shortage of statistics capable of illustrating America’s economic elephantiasis. Taxes, health care, wages — take your pick. But it’s the student debt numbers that most shock college graduates over 50. If you went to school in the 1960s or ’70s, it doesn’t seem possible that the class of 2012 is graduating with an average debt load of more than $25,000. The macro milestones tend to get more press — America’s $1 trillion in aggregate student debt now surpasses that owed on its credit cards — but it’s the 25 large that makes boomers whistle and start talking about the days when a semester at Berkeley cost the same as a trip to the laundromat.

Years ago: Continue reading →

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A Stain That Won’t Wash Away – NYTimes.com

20 Apr

The problem then (and perhaps now) is that it is the slow pileup of factors that causes an industrial disaster. Poor decisions are usually made incrementally by a range of people with differing levels of responsibility, and almost always behind a shield of plausible deniability. It makes it almost impossible to pin one clear-cut bad call on a single manager, which is partly why no BP official has ever been held criminally accountable.

Instead, the corporation is held accountable. It isn’t clear that charging the company repeatedly with misdemeanors and felonies has accomplished anything.

At more than $30 billion and climbing, the amount BP has paid out so far for reparations, lawsuits and cleanup dwarfs the roughly $8 billion that Exxon had to pay after its 1989 spill in Prince William Sound in Alaska. And BP will very likely still pay billions more before this is finished.

And yet it is not enough. Two years after analysts questioned whether the extraordinary cost and loss of confidence might drive BP out of business, it has come roaring back. It collected more than $375 billion in 2011, pocketing $26 billion in profits.

What the gulf spill has taught us is that no matter how bad the disaster (and the environmental impact), the potential consequences have never been large enough to dissuade BP from placing profits ahead of prudence. That might change if a real person was forced to take responsibility — or if the government brought down one of the biggest hammers in its arsenal and banned the company from future federal oil leases and permits altogether. Fines just don’t matter.

via A Stain That Won’t Wash Away – NYTimes.com.

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For Economists Saez and Piketty, the Buffett Rule Is Just a Start – NYTimes.com

17 Apr

A profile of the economists who’ve done the major work on income inequality in the US.

Emmanuel Saez and Thomas Piketty have spent the last decade tracking the incomes of the poor, the middle class and the rich in countries across the world. More than anything else, their work shows that the top earners in the United States have taken a bigger and bigger share of overall income over the last three decades, with inequality nearly as acute as it was before the Great Depression….

Both admire, even adore, the United States, they say, for its entrepreneurial drive, innovative spirit and, not least, its academic excellence: the two met while re-searchers in Cambridge, Mass. But both also express bewilderment over the current conversation about whether the wealthy, who have taken most of America’s income gains over the last 30 years, should be paying higher taxes.

“The United States is getting accustomed to a completely crazy level of inequality,” Mr. Piketty said, with a degree of wonder. “People say that reducing inequality is radical. I think that tolerating the level of inequality the United States tolerates is radical.”

via For Economists Saez and Piketty, the Buffett Rule Is Just a Start – NYTimes.com.

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Our apocalyptic odds – Environment – Salon.com

15 Apr

For example, sustaining our growing numbers and demands depends on a regular and unlimited supply of energy—a supply that, nevertheless, is limited. Approaching its limits means that we need to develop ever more efficient technology to squeeze out the last remains of the fossil fuels from Earth, which, in turn, depends on ever larger investments. However, investors want to see their money back, which proves increasingly more difficult the closer we get to the point of depletion. They have to invest more and more, but as less fuel can be mined, the returns become less and less. Approaching the point of depletion, investors will gradually draw their money back in order to reinvest it into something more profitable: at this point, a positive feedback loop starts up; more and more investors withdraw their money, this loop destabilizing the societal system as a whole. Energy shortage will destabilize this system because energy is the main constituent of our body, our numbers, requirements, and infrastructural organization.

In fact, the decreasing trend in the energy returns on investment was already apparent in the early 1990s, a trend which continues to the present day and which may develop into the feared financial and economic positive feedback loop. Food will be more expensive to produce, leaving the poor in jeopardy. And so on.

via Our apocalyptic odds – Environment – Salon.com.

Don’t trust corporate charity – Glenn Greenwald – Salon.com

13 Apr

On the surface the increased attention big business seems to be paying to general social welfare would appear to be a positive development. Major corporations go out of the way to ease the burdens of normal citizens, in the process dulling some of the harsher aspects of modern capitalism and earning for themselves PR boost. However it bears asking the question, as many good and well intentioned individuals there are sitting in the C-Suites of major companies, what would cause them to expend huge amounts of resources on pursuits which seem to have nothing to do with what their organizations are legally created to do? …

The answer lies in the reality that whatever these organizations put back into the communities in which they operate, communities which are often struggling under the weight of collapsing infrastructure, they expend far greater effort to ensure that they avoid paying their share of tax into public coffers. By avoiding taxes these companies ultimately help eliminate social services, a simulacrum of which they then provide in the form of charitable donations and other public outreach. The company keeps the funds it would’ve otherwise lost to tax and earns PR credibility for its supposed altruism, while the public loses out on the tax revenue which rightfully belongs to it

via Don’t trust corporate charity – Glenn Greenwald – Salon.com.

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Ban ‘Pure’ Speculators of Oil Futures – NYTimes.com

11 Apr

Today, speculators dominate the trading of oil futures. According to Congressional testimony by the commodities specialist Michael W. Masters in 2009, the oil futures markets routinely trade more than one billion barrels of oil per day. Given that the entire world produces only around 85 million actual “wet” barrels a day, this means that more than 90 percent of trading involves speculators’ exchanging “paper” barrels with one another.

Because of speculation, today’s oil prices of about $100 a barrel have become disconnected from the costs of extraction, which average $11 a barrel worldwide. Pure speculators account for as much as 40 percent of that high price, according to testimony that Rex Tillerson, the chief executive of ExxonMobil, gave to Congress last year. That estimate is bolstered by a recent report from the Federal Reserve Bank of St. Louis.

via Ban ‘Pure’ Speculators of Oil Futures – NYTimes.com.

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Gambling with economic security – Michael Lind – Salon.com

10 Apr

Any rational person would prefer the security of government-funded retirement and unemployment insurance to the insecurity of private retirement accounts and unemployment accounts. The truth is that Social Security and government unemployment insurance are far better deals than the universal capitalist alternatives.

In addition to being a bad deal for ordinary people, the push to increase stock market participation by the majority of Americans has had bad effects on the economy as a whole. At the root of the volatility of the global economy in the decades leading up to the crash of 2008 was an excess of global savings and too little wage-enabled consumption by ordinary people in developed and developing nations alike. This problem had many causes, including the strategy of Asian mercantilist countries of suppressing the incomes of their workers and the diversion of the gains from economic growth in the U.S. into rewards for shareholders and CEOs rather than higher wages for workers.

via Gambling with economic security – Michael Lind – Salon.com.

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Occupy’s Plans to Take Down Bank of America | The Nation

10 Apr

Alternet’s Sarah Jaffe today posted an article about Occupy’s future plans to protest the bank, ranging from direct actions to Move Your Money efforts, all of which will focus on the need to break up Bank of America.

April 13 will be the “move your money relay,” entailing escorting people from Bank of America branches, where they’ll close their accounts, to community banks and local credit unions.

OWS activist Nelini Stamp told Alternet, “We want to make sure that people feel like that is a direct action unto itself. It’s not just ‘I’m just moving my money from here,’ but actually people are feeling empowered and knowledgeable about the choices that they’re making when they’re making their banking decisions.”

The week of April 16 will feature Occupy activists attempting to disrupt home foreclosure auctions.

via Occupy’s Plans to Take Down Bank of America | The Nation.

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Cultural Liberalism Is Not Enough – NYTimes.com

8 Apr

Caught in the crosswinds of so many simultaneous crises — I have not even mentioned Vietnam — many liberals chose to focus, rather perversely, on a “rights” agenda and the internecine fights it engendered within their increasingly fractured coalition. They lost sight of the essential element that had made the coalition possible in the first place: the sense that liberalism stood with the common man and woman in their struggle against economic forces too large and powerful to be faced by individuals on their own.

Liberals must find a way to combine their cultural successes with new approaches to achieving economic equality. But they must do so unambiguously and unequivocally.

via Cultural Liberalism Is Not Enough – NYTimes.com.

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America’s dream unravels – FT.com

7 Apr

Has the 1% already flushed the workforce down the tubes?

Far from being an afterthought, or a moral side issue, the fate of America’s labour force is its most pressing problem. Almost every elected American pays lip service to an economy of the future based on brain power. But it takes time to build a new generation of homegrown brains and the country is doing its best to deter foreign ones. Unsurprisingly, much of the action is therefore shifting with the IQs, whether that is to Singapore, Canada, Germany or China. Roughly three-quarters of US private R&D comes from manufacturing companies, which now account for barely a 10th of the US labour force. In spite of a recent shift towards “reshoring”, the trend is still eastwards.

via America’s dream unravels – FT.com.

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