Listening to the Republicans talk about the #OWS movement, I am sorely disappointed that they seem to have started to give in to the rhetoric of the Left. Chris Muir’s cartoon today illustrates the issue.
First of all, agreeing that wealth disparity is a legitimate issue is agreeing to a false premise. I hear the protestors the world over crying for “economic equality” in a classic hue and cry of the “have-nots” vs the “have’s”, but in America today, we need to understand why the “have nots” have not.
To agree that this “disparity” is wrong intimates that there can be a limit set on how much wealth can be accumulated, who can accumulate it and who can decide what that number is. I’ve already called attention to this issue here and here by quoting F.A. Hayek from The Road to Serfdom, but it is worthy of repetition. From the chapter titled, “Who, Whom”:
I believe it was Lenin himself who introduced to Russia the famous phrase “who, whom?”– during the early years of Soviet rule the byword in which the people summed up the universal problem of a socialist society. Who plans whom, who directs and dominates whom, who assigns to other people their station in life, and who is to have his due allotted by others? These become necessarily the central issues to be decided solely by the supreme power.
More recently an American student of politics has enlarged upon Lenin’s phrase and asserted that the problem of all government is “who gets what, when, and how.” In a way this is not untrue. That all government affects the relative position of different people and that there is under any system scarcely an aspect of our lives which may not be affected by government action is certainly true. In so far as government does anything at all, its action will always have Borne effect on “who gets what, when, and how.”
For Republicans to agree to the premise that the #OWS crowd makes a valid point is agreeing that there is some extra-capitalist power that has the right, responsibility and authority to determine not only what each of us can earn but what we have permission to accumulate. This is the same process by which communists implement the labor theory of value to “homogenize” the worth of the individual into the worth of the collective.
To a populist, limiting the “rich” sounds good but a once a government has the power to officially stigmatize an economic class, confiscation and control over the masses is never far behind. Just ask any businessman in Chavez’s Venezuela.
Secondly, accepting this false premise is a failure to identify the true root cause of the issue. Without actually identifying the root cause – we keep recycling “solutions” that never resolve the problems. We only treat the symptoms. The primary scapegoat of these proto-communists is now Wall Street and the financial institutions that operate on that symbolic “street”.
But blaming the financial system is a ruse, a red herring. Blaming “Big Corporations” for making a profit is as well because of one simple fact – the ability for the individual to choose…and that also means that it is possible to choose poorly.
Let’s look at one of the “demands” of the movement – student loan debt forgiveness (but the analogy works for all consumer debt). First, we need to understand how a student can accumulate $150,000 in student debt. I would propose that for many it starts like this:
- The student and or parents make a choice that a degree from a college or university that is more expensive than they can currently afford is preferable to instruction at a state college or initial instruction at a community college.
- The student chooses a course of study based primarily on what they want to study without a true understanding of the worth of that degree in the open market.
- The student chooses to take out federally guaranteed student or private loans to pay for this education.
- Student graduates (or doesn’t) with a load of debt.
I would posit that this is pretty much the pattern.
Notice the operative word in each of those steps relates to “choice”. Society does say that you must have a degree to succeed; government has made education loans easier to get based on the premise the every student has a “right” to a college education and “Big Academia” has increased the costs of getting that degree because of the large demand and the loan funds to support it. So who have we identified here? That would be:
- The parents and student who chose the path
- Government who backed it
- Big Academia who set the price
…and what was the financial sector’s role in this? They provided a product to meet the demand. They funded this exercise based on the choices of the parents or student, protected by a government guarantee based on a price set by the college or university.
So tell me again why Wall Street is to blame? They are merely facilitating a choice, not forcing one. The signatures on the loan documents weren’t placed on there by force at the business end of a pistol.
So you weren’t a great risk and the institution still loaned you money? Well, the government has mitigated much of the risk to many of the institutions by guaranteeing you at the taxpayer’s expense. They merely followed the rules to grant your request for funds…sounds a little like the mortgage crisis, doesn’t it?
As far as I can tell, Wall Street and “Big Corporations” did not play a direct role in this specific process, as a matter of fact; these two entities donate and endow many of these expensive institutions where these students go to accumulate this debt. Nobody forced them to go to Sarah Lawrence and get a degree in Ethnic and Diasporic Studies or Film History. They CHOSE to do that.
Speaking of prices, Forbes just published an article titled “America’s Most Expensive Colleges” that included this nugget:
Sarah Lawrence College in Yonkers, N.Y., has long held the dubious honor of being one of the nation’s most expensive colleges. This year, it tops the list for the second year in a row, with an all-in price of $58,334 a year, or close to $240,000 for a four-year course of studies if inflation in higher ed continues on its current course.
$240K? A simple spreadsheet calculation shows that $240K at 3% interest for 10 years amounts to $2,317 per month. That’s $27,800 per year. To keep this at a manageable level of 20% of net income, this would require a starting net salary of $139,000, grossed up for 35% taxes, that is a starting gross of $187,650. How many Africana Studies graduates do you think are going to command that princely sum?
I’m picking on Sarah Lawrence but the same analogy works for just about any college. I’ll say it again, some degrees you get to get paid, some you just pay to get.
I’m sure that there are some degrees that are offered at Sara Lawrence that would generate some payback on that debt load but about 75% of them don’t have a chance in Hell of doing so. Have a look at what is offered below (from the Sarah Lawrence College website):
- Africana Studies
- Art History
- Asian Studies
- Computer Science
- Design Studies
- Environmental Studies
- Ethnic and Diasporic Studies
- Film History
- Global Studies
- International Studies
- Latin American and Latino/a Studies
- Lesbian, Gay, Bisexual, and Transgender Studies
- Modern Languages and Literatures
- Public Policy
- Science and Mathematics
- Science, Technology and Society
- Social Science
- Visual Arts
- Women’s Studies
I’ve been wrong. Most of these people aren’t Marxists or communists. They are just simpletons who chose badly and now are looking for someone to blame for their circumstances – anyone but themselves. They don’t want equal opportunity, they just want someone else to pay for their choices. This isn’t communism, it is a tantrum. If it is treated as such, it will pass.
They are just searching for someone else to take the responsibility. The class war that was set up by President Goldman Sachs and his administration has given them just that.
Republicans had better not buy into this childish behavior or 2012 is lost.