No one can really get a handle on the “Occupy Wall Street” crowd. When interviewed they don’t make sense. You see a young lady who says we need to go back to living off the land. She wouldn’t last a week. You see old hippies who have protested for a living all their lives. You see people with all the technical tools provided by a capitalist society speaking against the system that provided the toys. For the most part the groups seem to be young.
Anytime in this country you see inflation while the economy is headed south you can look to Washington. I have written several blogs about the insanity of college tuition increases in the face of a sinking economy and and fewer young people going to college. How can demand be going down and prices be going up?
Just look at the housing mess. A simple decision by government to expand home ownership started the problem. Then, banks were forced to loan to minority applicants by formula. Then Freddie and Fannie were put in place to insure loans regardless of the quality of the loan. Mortgage brokers sought anyone who could fog a mirror to seek a loan. Realtors sold mirror foggers houses. Banks made the loans knowing they could lay them off to Freddie and Fannie. The mortgage companies found Wall Street to package the loans into investment vehicles. Mortgage backed securities. But, no one could really lose since the government through Freddie and Fannie insured the underlying mortgages.
The result, everyone got a house. The real result, now every one’s house is worth a lot less and most are under water on the mortgage.
The root cause of the problem. Easy money and forcing banks to make bad loans. The culprit, the government.
Now we find we have over a trillion in student loans. The government, under Obama took over all student loans, taking the private sector out of that business. Obama, shortly after his inauguration, announced, every America has the right to a college education. Sound familiar?
Easy money in the form of student loans encourages every student to take a loan. Why work part-time when you don’t need the money? Why not go to college when you can borrow the money to go. With all this cash flowing into colleges and universities, why have a competitive tuition rate? Keep raising rates, overpaying professors, expanding facilities, increasing administrative personnel and their pay, and increase perks for all.
Now you see the young lady in New York lamenting the situation she is in today. She has a degree in English Literature and can’t find a job. She has $50,000 in student loans and can’t pay. She was mugged and had a hospital bill for $30,000 she can’t pay. Life is unfair. For her, life is unfair. Six years ago she could have found a job even with a degree in English Literature. She could have started paying off the loan and the hospital bills. But, not today.
Is it Wall Street’s fault she studied English Literature instead of nursing? Is it Wall Street’s fault she had to overpay by a magnitude of two for a college education that is being inflated by her government? Is it Wall Street’s fault she got mugged and had no health insurance?
No, the trillion in student loans is simply Obama’s fault. If the loans dry up the demand for college education dries up. If the demand dries up, the tuition’s go down. If the tuition’s go down the enrollments go back up. Simple as that. So, if your big beef is those student loans, go protest in the Rose Garden.
