Tuesday, April 12, 2011

Guest Post: Students, You Are Exploited Debt-Serfs

Students and parents, wake up: your only salvation lies in political engagement and action.

Of all the exploitative systems in the U.S., none is more rapacious than the Education Cartel. Like the proverbial frog that is unaware that it's being boiled because the water temperature rises so gradually, college students and their parents are unable to recall what higher education was like before students were herded into debt-serfdom.

Apologists for the Education Cartel like to blame Corporate America or the banks, but the reality is that the Federal and State governments and the employees of the Cartel are willing partners in the exploitation and fraud. How did we get to the boiling-water point where students are expected to take on $100,000 or more in debt to attend college--even a mediocre one?

Answer: immensely profitable Government-backed loans. If the Central State wasn't partnered with the Education Cartel, today's debt-serfdom would be impossible.

The partnership plays out on multiple levels. The San Francisco Chronicle recently reported that "Liberal" U.S. Representative Nancy Pelosi is fighting vigorously to defend the debt-serf-based empires of for-profit "colleges." Why? because these billion-dollar empires give her hundreds of thousands of dollars in campaign contributions (duh!).

("Conservatives" love for-profit "colleges" for the same reasons, of course.)

There is nothing remotely educational or liberal about an exploitative Cartel that provides no measurable value to its students while graduating 10% of them. As reported in The New Republic, when General Accounting Office (GAO) investigators posing as prospective students applied to 15 major for-profit "colleges," every one made misleading sales pitches.

The largest for-profit, the University of Phoenix, graduates less than 10% of its students within 10 years.

You may not get any useful skills or a meaningful diploma, but you will end up with $100,000 in debt that can never be written off. Loans imply risk: nobody forces a lender to take on the risk of lending money to a borrower. If the borrower ends up being unable to pay his debts and declares bankruptcy, the debt is wiped off the books and the lender loses the money that was at-risk.

Thanks to the Central State's partnership with the Education Cartel, student loans cannot be dismissed even in bankruptcy. This makes them unique in the world of credit and debt.

Banks lobbied the Central State for guaranteed, no-risk student loans, and the Government was pleased to oblige. The Status Quo fully supports colonizing the "home" population of vulnerable students and turning them into debt-serfs that banks can hound til death and beyond; they're much more pliable and less troublesome than foreign populations who might rebel against the Imperial lash. (This is drawn directly from the Survival+ critique.)

The Education Cartel has mastered the art of propaganda. You can read hundreds of media stories on the plight of K-12 education in the U.S., and the only salary numbers you will find are those for entry-level teachers--usually poverty-level wages below $30,000 in low-income states and in the mid-$30,000s in coastal states.

This careful pruning of published salaries naturally creates the impression that teachers everywhere are toiling away selflessly for poverty wages.

But this is not the case for senior teachers in high-wage states. Courtesy of correspondent Anthony T., here is a database of Illinois teachers salaries, compiled from data provided by the Illinois Board of Education (ISBE). Here are a few sample salaries:

Salary: $172,163
Position: High School Teacher
Full/Part Time: Fulltime
Percent Time Employed: 100%
Assignment: Physics (Grades 9-12 Only)
Years Teaching: 30.5
Degree: Master's

Salary: $163,526
Position: High School Teacher
Full/Part Time: Fulltime
Percent Time Employed: 100%
Assignment: Driver Education
Years Teaching: 32
Degree: Master's

For comparison's sake, this is twice the salary of an Associate Professor at one of the top public universities in the world, the University of California.

These high school teachers' salaries are more than triple the median household income in the U.S., which according to the Census Bureau is $49,777 annually.

This is not to suggest that all teachers are pulling in salaries in this range; the point is the Education Industry is extremely selective about which wages, pensions and benefits packages (for teachers and administrators) get publicity.

Apologists for the Education Cartel always compare these salaries with bloated CEO compensation. In other words, $170,000 a year and $120,000 a year pensions (not counting medical benefits) are "cheap" compared to $30 million pay packages.

Missing in this snapshot is the relative scale: there are about 5,000 CEOs of publicly traded companies which can support bloated CEO pay, while there are 22.5 million public sector employees, millions of employees in the Education Cartel and tens of thousands of bureaucrats, senior teachers, etc.

In other words: let's say we just expropriate ALL corporate profits for Central State spending. Corporations skimmed $1.6 trillion last year, record profits, and companies without GE's tax-avoidance Panzer divisions foolishly paid some $350 billion in corporate taxes, leaving $1.25 trillion to be expropriated.

Given the $1.6 trillion Federal deficit and the states' $150 billion deficits, that means taking every dollar of corporate profit would still leave us a $500 billion Government deficit. If we look at government expenses, we find that roughly 80% are personnel-related: salaries, benefits, pension costs, outside consultants, etc. Most of the Federal entitlement and Defense spending is also direct transfers to beneficiaries and employees.

One person's "waste" is another person's $150,000 a year salary and $100,000 pension.

Since the Federal government spends $3.8 trillion and state and local governments spend another $1.5 trillion, then we can estimate that the State (all government) accounts for $5.3 trillion, or 36% of the entire U.S. GDP.

The state of California currently spends $3.3 billion or 3.2% of its annual budget on the University of California system.

In other words, it's not that there's "no money for education"--it's that trillions of dollars are being squandered on other "priorities" like prisons, $1,000 per gallon fuel in Afghanistan, $170,000 a year "defense consultants," pension payments, etc. etc. etc. Public-sector toadie California Governor Jerry Brown is out whipping up support for his "increase taxes or else you all die" campaign by threatening students with higher tuition and fees--as if they haven't already been stripmined for years by skyrocketing fees: Brown warns of soaring UC costs in all-cuts budget.

In other words, if you don't give us more tax money, we're going to nail students--even though the UC system accounts for a meager 3% of the state's bloated expenses.

This is propagandistic thuggery at it's best/worst.

The rest of the article can be read here:

http://www.zerohedge.com/article/guest-post-students-you-are-exploited-debt-serfs

By Charles Hugh Smith from Of Two Minds

8 comments:

  1. What about all the super-whiny cops and firemen/firewomen whose unions and benefit packages are much stronger than those of the teachers', yet are mysteriously exempt from the de-funding efforts of Wisconsin, Ohio, Indiana, etc.? Many moonlight doing private security details and earn in total more than the police chief or fire chief in their communities. And they get to retire after 20 years with princely benefits. Yet the focus is always on the teachers . . . go figure. Police and fire folks claim they risked their lives on the job, yet no one forced them to go into those occupations. It was their choice. Why do current wage earners need to pay taxes to support princely retirements of the police and fire folks?

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  2. I consider the strong public unions as wall street "lite"

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  3. I'm with you on the for-profit college/gov't loan cartel, but picking two random 30-plus-year teachers' salaries does nothing to support your point. The average salary for a teacher in Illinois is $58K -- hardly a call for outrage.

    Elementary and high school teachers and their unions didn't cause the debt crisis and aren't the reason colleges (especially law schools) are charging exorbitant rates. That's a political attack that holds no water.

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  4. It's true that elementary and high school teachers didn't cause the debt crisis but it is also true that the benefits of all public sector employees are a slap in the face to the private sector working taxpayer. The city of Los Angeles for example will be using nearly 20% of all revenue to pay out retirement benefits for public employees. That is unfair and in the end these benefits will be cut no matter how loud they scream and yell.

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  5. Both parties are not great on this issue, but um, Nancy Pelosi taking a stand on Pell Grants doesn't exactly pin this on the Dems. Democrats Al Franken, Tom Harkin, Sherrod Brown, and BARBARA FRICKING BOXER have all come out in support of indebted students, and tried to overturn the GOP-passed laws from 2005 that made PRIVATE student loans non-dischargeable in bankruptcy. Dems like Ben Nelson (grrrrr...) haven't helped, but the screwing students have taken has been mostly at the GOP's behest, and the bankruptcy provisions sure wont' be restored by a conservative congress.

    So how about I push the Dems to make more sense, and you push the GOP to stop blocking reform too, and maybe we'll both get somewhere? Because this is ANYTHING but a Dem-created problem, and right now Dems are the only ones working on a solution.

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  6. drain the military. far from protecting you from anything, it's your nation's chin, and you're leading with it.

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  7. I cant believe ANY teachers pull in that kind of salary! NOt with constant cuts and all the crap they get from thier own administration.

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  8. It is okay for a high school physics teacher to be making that much. High school physics is substantial knowledge. The driver's ed teacher, however, might be making too much.

    Also, for teachers in general, if you want to attract the smartest people to teaching, it helps to pay teachers more.

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