Thursday, June 6, 2013

Thank You Mr. Feckless President

Part of the Dodd-Frank financial reform bill - at best a very tepid attempt to reign in the excesses of the financial industry – was the creation of the Consumer Finance Protection Bureau. The CFPB, a brainchild of Elizabeth Warren, now a senator from Massachusetts, was one of the only good things to come out of the act. Dodd-Frank’s already weak improvements in regulating the financial industry are currently being further watered down by a massive bankster lobbying effort. No matter how low the thieving banksters get, there always seems to be another moral nadir for them to plumb.
Warren was naturally slated to be nominated for the head of the CFPB, but since she’d certainly have faced stiff opposition from the Repugs, Obama was too chickenshit to nominate her. His fecklessness, in this case at least, was a great gift to the people, since Warren was then free to contest a senate seat which she won. Obama went on to nominate Richard Cordray, also a good pick for the post, but since the Repugs hate the idea of financial regulation as a matter of principle, they’re doing everything they can to block his appointment unless or until they can weaken the commission’s mandate into worthlessness.
Had Obama nominated Warren she’d be stuck in limbo, rather than be the strongest voice for banking and finance reform in the Senate. Lately she’s been pushing the idea of pegging student loan interest at the same level as what the big banks are paying. Student loan rates are soon to rise from 3.4% to 6.8% if new legislation isn’t passed. This is part of the cockamamie way politics is made in Washington, with temporary fixes to long-term problems that only require the same shit sausage to be recycled again later. Meanwhile the banks are paying 0.75% so she’s been asking why students should be paying 9 times as much interest as the banksters.
It gets worse: The US government earned a cool $51 billion from the student loan program last year. So the US is making a lot of money off of the backs of struggling students at the same time it is paying the banks to take its money. When you charge less than the rate of inflation, you are essentially giving the money away. One of the ways the banksters have been using that free money is to turn around and buy US treasuries - which are now paying about 2%. This free money is one of the reasons why the banks just posted their best profits ever.
Senator Warren will hold their feet to the fire. They’ll get away with their shenanigans for now because they own the government, but Warren will be relentless in changing the paradigm and I dare say, if she chose to run for president in 2016 she’d give Hillary a run for her money.
So thank you Mr. Feckless President for giving us Senator Elizabeth Warren.
Student loan debt, at $1.1 trillion, now exceeds credit card debt, with the average student owing about $27,000 at graduation. What’s more, student loan debt cannot be written off in bankruptcy, except in very rare circumstances. A lot of that debt has been taken on because government is no longer willing to support higher education to the extent it once was or should be. After all, an educated citizenry is one of the primary goals of society, so it makes no sense to punish people who seek a higher education who don’t happen to have rich parents. Anytime anyone who could benefit from higher education is denied the opportunity, the whole society loses.
In some European countries, students who qualify for public universities not only do not pay tuition but also receive a stipend to allow them to concentrate on their studies. I graduated from City College (now University) of New York, while working 30 hours a week and single parenting. It was very tough, but it would have been impossible if I’d had to pay tuition. At the time, back in the sixties, tuition was free, I only had to pay a small student fee and buy textbooks. Today there are no (that I know of) free public institutions of higher learning in America, and many of them are not just charging tuition but charging a lot.
Charging high tuition at public colleges and gouging of student borrowers is part of the trend in the last 30 years of the 1% not being willing to pay their fair share of the cost of a healthy and educated society. Personal responsibility, they scream, while they pad their own deep pockets with tax breaks and corporate welfare. They bankrupt their banks by making casino bets with the people’s money, knowing Joe Schmo, the US taxpayer, will bail them out, while they rail against the 47% who only want government handouts for inconsequential things like food, health care, shelter, education. Congress wants to cut back on the food stamp program, literally taking food out of the mouths of children, to save a few billion dollars, while refusing to consider a very small stock transaction tax - 0.5% - that would yield $350 billion a year.
One Repug congressman working hard to cut slothful unworthy takers off of food stamps, is himself a very big benefactor of farmer’s welfare programs, the biggest receiver of farm aid in his state. But, of course, that’s somehow different.
In fact, the Repugs only control the House of Representatives by a wide margin because of efficient gerrymandering, since Dumbo candidates for the house received more votes in total than the Repugs. That disconnect doesn’t happen only in the US: in the recent Malaysian election the ruling party won 60% of the seats even though the opposition won the popular vote. Democracy is sloppy, but that’s unfortunately all we have to work with.
Meanwhile there are individuals like Elizabeth Warren who rise up to make great changes in spite of the built-in disadvantages of the political systems they are forced to work with.