You could make a good argument that everything about capitalism
strip-mines human beings for profit, but it's rarely as blatantly an
argument for indentured servitude as this.
Undercover Blue at Hullabaloo:
Jeff Bryant's alarming post at Salon details
some of the financial services sector's inventive, new schemes for
funding education. Wall Street already saw K-12 schools as "the last honeypot,"
a steady, recession-proof, government-guaranteed stream of public tax
dollars just waiting to be tapped by charter schools. It first had to
convince states to increase competition – meaning eliminating teachers
and other public employees standing between investors and their money.
One
could argue that the right's small government, low taxes mantra always
had as its goal eliminating the "creeping socialism" of government
providing education and other public services on a not-for-profit basis.
(What, no middle-man markup?) "Starving the beast" was never about the
size of government, but about eliminating public-sector competitors and
making sure the right people take a percentage of vital services funded
at taxpayer expense.
Since the collapse of the housing market, the giant pool of money is
looking for other places to invest. So it's out with the NINA loans and
the CDOs and in with the SLABS, CABS, PPPs, and ISAs. Jeff Bryant
writes:
It’s
not hard to see the allure of SLABS [student loan asset-backed
securities]. Student loans seem to be an endless stream of revenue as
colleges and universities continue to increase tuition, economic
conditions and employment transience feed the unemployed back into
continuing education, and political leaders urge everyone to attend
college. The income stream is nearly guaranteed to pay off because the
loans are next to impossible to discharge in bankruptcy.
A
Huffington Post article by Chris Kirkham states, SLABS offer “seemingly
unlimited growth potential at virtually zero risk. The burden of college
loan repayment falls entirely on students’ backs, shielding
corporations from the consequences of default.”
Remember
when mortgage-backed securities were a guaranteed, sure thing? There's
much more here: ‘capital appreciation bonds’ (CABs) for financing public
schools, “public-private partnerships (P3s) where developers provide
capital to build schools they then lease to universities (as happens
with K-12 charters). Don't get me started on P3s.
The
ultimate solution in the private edu-debt sphere emerged recently when
conservative ex-governor of Indiana, now president of Purdue University, Mitch Daniels proposed
to the U.S. Congress that, “Instead of taking out a traditional college
loan, students would have the option of finding an investor – possibly a
Purdue alum – to finance their degree in exchange for a share of their
future income.”
If
you read that and said out loud, "indentured servitude," so did I.
Daniels' (and others') first swing at these Income Share Arrangements
(ISAs) whiffed, Bryant explains. But?
But
like what so often happens, quirky proposals from conservatives that
appear like blips on the outer edge of the crazy radar, actually have a
huge think tank machinery behind them. As a report from an Indiana news outlet explains,
the financial vehicles Daniels alluded to are what’s known in the biz
as Income Share Arrangements (ISAs). The reporter sourced the concept of
ISAs to 1955 and University of Chicago economist Milton Friedman, the
god of right-wing privatization advocates.
Beth Akers, a fellow with centrist think tankBrookings,
has argued ISAs should “play a role” in financing student loan debt.
She posits that the central problem with higher education is there is
“almost no incentive” for students to choose schools and courses of
study that pay off down the road in terms of lucrative salaries. A broad
market for ISAs could change that by enabling students to
“collateralize their financing with future earnings, just as home buyers
collateralize their mortgage with the house itself.”
Except
here, humans themselves are the collateral. This financial Matrix
bypasses all the intermediate messiness of productive capitalism. Why
should "job creators" bother with the inefficiency of trading in actual
products and services when, by plugging them into a matrix of
derivatives, you can change a human being into revenue?
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