The PJ Tatler

The Genesis of Occupy Wall Street Distilled to Two Words: Student Loans

I hated UC Berkeley. Loathed it. Despised it. Couldn’t shake the dust off my feet fast enough after I graduated. But graduate I did, and pretty well too, if my Phi Beta Kappa key has anything to say about it. Knowing my feelings about UCB, my daughter asked a good question: “Why didn’t you transfer out?”

I had an equally good answer, although one that was virtually impossible for a well-to-do suburban kid, in a day and age of vast student loans, to understand: “I didn’t have the money.” My parents had no wealth; I had no wealth; my scholarships were real, but small; and — this is the important point — my student loans were minimal. The latter reflected the fact that, because I knew that my parents had no wealth, I had no wealth, and my career options as a history major were limited, I was unwilling to hunt around for a different school that would, inevitably, have been more expensive.

It never occurred to me to take on a debt load that I might not be able to repay. My college choice and student loans were calibrated to my expectations. I even chose an affordable (albeit marvelously wonderful) law school. By the time I graduated, after 7 years of higher education, I had only $15,000 in debt, which I paid off within three years.

For me, being prudent in my financial obligations was a no-brainer. I mean that. My brain never raised the possibility of taking on a larger debt load than I could reasonably handle. Instead, when I needed more money for pesky little things like tuition and textbooks, I got a job. Several jobs. Summer jobs. School year jobs. Evening jobs. Whatever. I also lived at home when I could, which wasn’t fun (although my Mom, bless her heart, did my laundry). My parents charged me rent (don’t ask), but I paid them less than I would have a third party landlord. All in the name of going to school the old-fashioned way: affordably.

Nowadays, of course, student loans are de rigueur. How do I know that? Because it seems as if every one of the loopy Occupy Wall Street dudes and dudettes interviewed complains about those students loans. (See here, for example.) Two out of thirteen of the demands on the Occupy Wall Street website focus on student loans:

Demand four: Free college education.

[snip]

Demand eleven: Immediate across the board debt forgiveness for all. Debt forgiveness of sovereign debt, commercial loans, home mortgages, home equity loans, credit card debt, student loans and personal loans now! All debt must be stricken from the “Books.” World Bank Loans to all Nations, Bank to Bank Debt and all Bonds and Margin Call Debt in the stock market including all Derivatives or Credit Default Swaps, all 65 trillion dollars of them must also be stricken from the “Books.” And I don’t mean debt that is in default, I mean all debt on the entire planet period.

It’s pretty clear that a core issue animating these protesters is the ridiculous debt obligations that they voluntarily assumed. It’s therefore almost funny to see the working class union types leaping on board to help out kids whose demands, if acceded to, will pile ever greater debt on the ordinary working stiffs in America.

Student loans started out as a good idea. The GI Bill got the whole thing started, by having the government create a program that provided higher education for those who would otherwise be unable to afford it. The end result was a dynamic, educated group of former military people (trained, disciplined, seasoned and responsible) who helped sweep the country to great prosperity during the 1950s and early 1960s.

What most people forget now is that the GI Bill was payment for services rendered. In that way, it differed dramatically from student loans, which are payments for . . . what? It’s questionable whether those students currently getting “educated” at America’s top propaganda institutions . . . er, colleges and universities, will contribute anything to the economy — and we know that render any services to the American people, in the cause of American freedom, in exchange for those cash handouts.

Nor are student loans analogous to any other types of loans, all of which require security, in the form of a tangible item (your house, your car, your engagement ring) or in the form of a guarantee from someone other than the federal government. Guarantees from someone other than the federal government mean that some knows the borrower really well, and is willing to gamble on the debtor’s success and integrity.

In addition to sending a message to the lender (“this person is a good risk for loan purposes”), personal guarantees also impose a moral obligation on the debtor, who might well feel constrained to pay back a loan before the bank takes Mom’s house away. By contrast, those federal government guarantees are nothing more than debt shifting. Just as the navel-gazing student feels no obligation to pay back the bank, he doesn’t feel any obligation to pay back the government, either.

Free money for entitled young people has created all sorts of problems. First, of course, it’s driven up college tuition costs. With the government writing the check, there’s no reason not to have creeping tuition inflation.

Second, the student loan program has given young people the completely unfounded and unreasonable belief that their current economic situation and future earning potential are irrelevant to their academic choices. You can just see them thinking “So what if I’m broke now and am going on to become a womyn’s study or GLBT major and future barista. Society still owes me $200,000 to enjoy a few years at Harvard.”

Third, the loans have expanded greatly the number of young people who can be indoctrinated in Marxist crap by grossly overpaid professors at America’s “finest” schools. On that subject, the Occupy Wall Street demand I referenced above is a perfect example of the product emerging from these overpriced academies of indoctrination. The demands are unicorn and fairyland stuff, made possible only by immersion in the academic world of Marxist fantasy.

And fourth, the loans have created a self-entitled group of people who, rather than pay off their debt, feel that it’s totally appropriate for them to attack others’ financial livelihood, as they’re doing now when they try to interfere with our nation’s economic core.

Here’s something to think about when you think of those college and post-college debtors swarming America’s financial centers: Back in the 1960s, college campuses were awash with anti-War protesters. They spoke, yelled, and screamed about American imperialism, about downtrodden Vietnamese villagers, and about blood-thirsty American soldiers. These vehement, and often violent, protests ended abruptly in 1973. In a way, this was rather surprising, because American imperialism, downtrodden Vietnamese villagers, and blood-thirsty American soldiers were still topping the nightly news. What changed, though, was that the college kids no longer had skin in the game: the draft had ended.

Just as the Vietnam war protests had nothing to do with actual principles, and everything to do with a spoiled generation’s fear of the draft; so too do today’s protests in America’s financial centers have nothing to do with concerns about America’s economy, and everything to do with deadbeat kids who willingly took on an unreasonable amount of debt, and are now facing the financial consequences for their cupidity and stupidity.

Cross-posted at Bookworm Room