Two weeks ago in an op-ed The Wall Street Journal ranted about "Obama loans" and how they'd break the country's back if Obama's efforts succeeded, i.e. to cap private loans' interest and offer more federal loan low-interest options. In truth, they were really ranting about how investors' share prices would dive, as well they should! It's more critical for those share prices to dive than more students be inundated with debilitating private loan debt from the equivalent of usurers and loan sharks.
This week Mr. Obama launched visits to college campuses (e.g. in North Carolina and Colorado) and made a plea to congress to allow the government - linked Stafford loans to remain at their current 3.4% interest level- as opposed to being raised to 6.8% which would permanently debt-cripple millions. Well, today' WSJ op -ed ('Freshman Class President', p. A14) didn't like that at all. Apart from castigating Obama for "fuzzy math", The Journal went off on student "deadbeats" who because of their selfish greed (in seeking to preserve 3.4% interest on Stafford loans), would "sock it to taxpayers". Hardly! More like socking it to deep pockets, spoiled brat investors....griping about a $24 /share price only going up to $28, while the rest of us make do with 0.4% money market accounts!
The Journal also whines that:
"the fixed rate of 3.4% is barely above the 3.1% that the Treasury is now paying on the 30-year bond, and not far above the 1.9% on the 10-year."
Left unsaid is how the students themselves (or their parents), are having to pay off 3.4% loans (which may soon become 6.8% loans in July) off using money that barely earns 0.2% in bank savings or checking accounts, thanks to the Fed's near zero interest rates! Yet no one is barking about that! We are instead to feel sorry for the poor widdo speculators....errr...."investors", who stand to lose some of their pocket change if any of these kids manages to keep their heads above water.
In a previous blog:
I showed how the student loan system has been gamed by the speculator -investor class to rip students off and shackle them to permanent debt servitude by outrageous interest rates (often made variable in the contracts) and refusing any flexibility or attention to real hardship cases. Instead The Journal disses all students as "deadbeats" if they seek to escape from their "responsibilities" including by siding politically with Obama for a sane and rational student loan policy.
Thus The Journal's further whine that "the government has seized almost the entire student loan market" doesn't hold water. What Mr. Obama is trying to do is initiate more sensible federal loan options that terminate hardship cases after a defined period - say ten years- and also offer more flexible options. Meanwhile, the Journal and its investor denizens would prefer to see millions in strangling, suffocating debt the rest of their lives so long as share prices for the private lending companies remain high.
Perhaps the most outrageous insinuation in the whole editorial is one where the Journal accuses students of deliberately opting for "low skill jobs" because of being "desperate for paychecks".
Well, uh DUH! Yuh think! The implication is that if these recent grad "dead beats" and "slackers" just bestirred themselves to pound the pavement a bit harder they'd end up with a high paying job to pay off their loans muy rapido, and there'd be less whining. Right, and pigs fly and Mitt Romney feels the pain of the common man when he enters a Safeway or King Soopers and gets sticker shock from the milk, bread, cereal and pork prices!
There isn't one scintilla of understanding that we're in a low aggregate demand environment and corporations are sitting on nearly $2.7 trillion rather than creating decent -paying jobs for the grads to have a chance. Instead all the blame is placed on the students, for seeking to escape the millstones round their necks and not looking hard enough for great jobs, or Mr. Obama ("the freshman prez") for attempting to help them!
The sad fact is that the reactionary financial elites have no clue of the suffering of millions of students, and why they face insurmountable pain if their interest rates are raised. Like Mitt Romney, the finance mega-elites could care less, so long as the investor class makes out like bandits, while ordinary savers are left to suck salt at the hands of the Federal Reserve's low interest rates.
As for the incessant whine that the "taxpayers are being shafted" - last I checked the students ARE the taxpayers, as are their parents (who may have co-signed for their loans). From where I sit the taxpayers ARE being shafted, but not by the effort for a saner student loan policy! Rather, they're being shafted by a renegade clique of financial gamesters and speculators who thrive off debt and the bigger the better. These creeps are cousins to the same scoundrels that created the credit default swap driven financial meltdown 5 years ago.
Students will have a chance to send a message to the reactionary elites in November, but they had better be sure all their voting documents (including state IDs) are ready well before!