"Looters Will Be Shot"--Except for hedge fund managers, shoddy manufacturers, and owners of for-profit colleges

I passed by a low spot on Highway 16 a few days after the Great South Louisiana Flood of 2016, and I saw a house that had obviously been inundated with water.  Nailed to a tree in the front yard was a spray-painted sign: "Looters will be shot."

But of course, the sign isn't quite accurate. Some looters might get shot: the scumbags prowling flooded subdivisions looking for something to steal. It wouldn't bother me if someone nailed one of them with a Bushmaster assault rifle. That's what those rifles are for, after all.

But other looters are perfectly safe from any kind of vigilante justice.  Hedge fund managers, for example, get a special tax break for the ultra wealthy. President Obama--that hopie change guy--didn't bother to clean up that scam, which he easily could have done.

Other corporate looters run for-profit colleges. In fact, Martin Nesbitt, chairman of the Obama Foundation, is CEO of an equity fund that plans to get into the for-profit-college scam business.

In fact, the working people of America get looted all the time, whether or not they are victims of a natural disaster.  For example, I was pushing a wheelbarrow load of wet sheet rock to a trash pile yesterday, and the axle of the wheelbarrow broke. It couldn't handle the modest load that it was supposedly designed to carry.

A co-worker examined the damage and told me to throw the wheelbarrow on the trash pile along with the sheet rock, which I did. This was a new True Temper wheelbarrow! I'd say whoever bought that wheelbarrow was looted.

And today, I was reminded of another corporate looter. I took some time off from flood-damage cleanup to smoke a rack of ribs in my Cabala's electric smoker--which is a piece of shit. For one thing, Cabala didn't make the smoker; Masterbilt did. Cabala's just put its name on the thing to deceive buyers into thinking they were buying a quality product.

The thermometer on the smoker's lid (marked Masterbilt) registers temperatures up to 700 degrees, but I've never gotten the damn thing hotter than 250.  The plastic handle broke the first time I dropped the lid, and the little wooden side tray is busted. Do you think I was looted when I bought that piece of junk? You're damned right I was.

In fact, the Great South Louisiana Flood of 2016--Redneck Katrina--reminded me again and again of how much cheap crap the multinational corporate looters sell to working Americans. Thousands of tons of debris line the streets of Denham Springs, Louisiana--piles of worthless stuff. Microwave ovens, refrigerators, freezers, fake-wood furniture: all crap.

In fact, I don't think many flood victims mourn the loss of their chattel. They knew it was junk when they bought it. They know the Chinese are making more crap for us right now and that they can buy their new crap at the Denham Springs Walmart just as soon as it cleans up its own flood damage and reopens.

Even our homes are crap, sold to us by looters. The doors on new spec houses aren't made out of wood anymore; they're made from some kind of laminate. If the bottom six inches of one of these fake-wood doors is subjected to water for just 24 hours, the whole door is ruined. I know; I tossed out about 30 of them.

But at least you can save the hinges, you might think, and the door frames. But no--these cheap faux-wood doors are sold new with hinges and door frames already attached. When you throw your ruined door on the trash heap, you might as well toss in the hinges and the door frame.

So--to return to my main point--not all looters will be shot. So if you are a looter who wants to rip off your neighbor, don't steal his home generator. You might get your ear shot off.

No, do what Martin Nesbitt is doing; buy a for-profit college.

References

Blake Neff. America's Largest For-Profit College Sold to Group Led By Obama's Best Friend. Daily Caller, February 28, 2016. Available at http://dailycaller.com/2016/02/08/americas-largest-for-profit-college-sold-to-group-led-by-obamas-best-friend/

Gretchen Morgenson. Ending Tax Break For Ultrawealthy May Not Take Act of Congress. New York Times, May 6 2016. Available at http://www.nytimes.com/2016/05/08/business/ending-tax-break-for-ultrawealthy-may-not-take-act-of-congress.html?_r=0

Reflections on Gretchen Morgenson's Recent New York Times Column on Student-Loan Processing Companies

Gretchen Morgenson is the New York Times' best columnist. Week after week, she writes with clarity and precision about the shady dealings of our nation's financial industry.  In fact, in some issues, Morgenson's column is the only writer worth reading in the Sunday Times.

Thus, I was pleased when I opened the Business Section of yesterday's Sunday Times and saw Morgenson's column on the student-loan servicing industry. As she pointed out, the U.S.  government pays 11 companies a total of $600 million a year to service millions of student loans. And these companies are doing a terrible job.

A recent report by the Consumer Financial Protection Bureau, which Morgenson summarized, analyzed numerous complaints by student-loan borrowers. The loan servicing companies are giving out misinformation, failing to record loan payments properly, and failing to tell borrowers about payment options that might help them stay out of default.

In short, it's a mess. I hope Ms. Morgenson digs deeper into the activities of the loan servicing companies.  Here are some questions I have: Who are the senior executives of these companies: Navient, Discover Bank, Great Lakes, and the rest? What is the annual compensation of the fat cats who run the companies  that are mishandling the loan-collection process?  Are these companies making campaign contributions to key federal legislators? If so, which Congresspeople are getting the money, and how much?

And I would really like Ms. Morgenson to turn her attention to Educational Credit Management Corporation, the most prominent company that opposes bankruptcy relief for student-loan debtors. The Times recently published a story about ECMC's ruthless tactics in the bankruptcy courts,  and it ran another story about ECMC's tactics in the Roth case, involving an elderly woman with chronic health problems who was living on Social Security checks of less than $800 a month.

How much does ECMC's CEO make? We know that former CEO Richard Boyle made $1.1 million in 2010. What is the current CEO's annual compensation to run a company that hounds oppressed student-loan debtors? And to whom is ECMC making campaign contributions?

A lot of good investigative reporting needs to be done about the student-loan industry. And Gretchen Morgenson is probably the best person to do it. Go for it, Gretchen!

References

Tara Siegel Bernard. Judges Rebuke Limits On Wiping Out Student Loan Debt. New York Times, July 17, 2015. http://www.nytimes.com/2015/07/18/your-money/student-loans/judges-rebuke-limits-on-wiping-out-student-loan-debt.html

Natalie Kitroeff. Loan Monitor Is Accused of Ruthless Tactics on Student Debt. New York Times, January 1, 2014.  http://www.nytimes.com/2014/01/02/us/loan-monitor-is-accused-of-ruthless-tactics-on-student-debt.html

Gretchen Morgenson. A Student Loan System Stacked Against the Borrower. New York Times, October 9, 2015. Accessible at http://www.nytimes.com/2015/10/11/business/a-student-loan-system-stacked-against-the-borrower.html

John Hechinger. Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans. Bloomberg.com, May 15, 2013. Accessible at: http://www.bloomberg.com/news/2012-05-15/taxpayers-fund-454-000-pay-for-collector-chasing-student-loans.html

David Leonhardt says it's harder and harder to get into Harvard University: "Frankly, my dear, I don't give a damn!"

David Leonhardt wrote an essay in the Sunday issue of the New York Times about how hard it is these days for someone get admitted to an Ivy League college--particularly if the applicant is an American. In 1994, Leonhardt wrote, about 45 college-age Americans out of every 100,000 were attending Harvard.  In 2012, that number dropped to just 33 out of every 100,000.

David Leonhardt

At the same time, the number of foreign students attending our nation's most elite institutions is growing. According to Leonhardt, about 10 percent of the student body at many of the nation's most selective colleges are foreigners.

Why are our elite institutions admitting more foreign students?  Because they can pay the full freight of tuition, room and board without the need for grants or scholarships In other words, foreign students from wealthy families are an important revenue source for America's most prestigious colleges and universities.

Leonhardt's essay appeared just a few days after Evan Mandery published an article in the Times deploring the fact that the nation's most elite institutions give admission preferences to the children of their alumni.  Mandery said that legacies have a big edge in the admissions process similar to the edge given to African Americans, Hispanics, and varsity athletes.

Take together, Leonhardt's essay and Mandery's essay convey a very clear message. If you want to go to an Ivy League college or a handful of other selective institutions it will help you if you are Hispanic, African American, the child of an alumnus, a varsity athlete or a wealthy foreigner.  And as Leonhardt pointed out, a "large fraction" of students from all these categories come from high-income families.

I could not tell whether Leonhardt was critical of this trend or a supporter.  Like so many New York Times op ed essays, Leonhardt's article wallows in cryptic indecision.  Leonhardt concludes his essay with these lines: "[T]hese [elite] schools have become a patchwork of diversity--gender, race, religion, and now geography. Underneath the surface, though, that patchwork still has some common threads." 

I have no idea what that means.

I do know that white male Southerners and Midwesterners who come from low-income families have very little chance of being admitted to an Ivy League school.  But so what?  Why would anyone who grew up living in the real world want to enter a higher education environment in which admission decisions are based--even in part--on race and greed? 

In my opinion, young people who want to expand their horizons by going to college should skip the elitist institutions--Harvard, Yale, Emory, Brown, etc. etc.  Instead, they should consider studying outside the United States.  Why not attend college in Monterrey or Guadalajara, for example?  Even if the educational experience is unexceptional, Americans studying in Mexico will learn an important second language and immerse themselves in another culture.

As it happened, Leonhardt's essay appeared in the same issue of the Times as an article about  Elizabeth Warren, a former Harvard Law professor and now U.S. Senator.   Warren has been critical of the federal government for regulating the finance industry in a way that favors Wall Street. "The game is rigged," Warren was quoted as saying, "and the American people know it."

Warren is right of course, but it is not only Wall Street that has rigged the game against the American people. Our elite colleges and universities have rigged the game as well.  It is no accident that Lawrence Summers, former president of Harvard, has also been a hedge fund manager and was one of President Obama's top economic advisers.

Warren quotes Summers as telling her she could be an outsider or an insider, and Warren obviously portrays herself as an outsider and friend of the little guy.  And maybe she is.  But we should not forget that Warren advanced herself in the world of academia by portraying herself as being part Native American--specifically a Cherokee--when in fact she almost certainlyis  not.

And so I repeat my question. Why would anyone want to attend an elite college where a person's advancement can be enhanced by the fact that he or she might have a trace of Native American blood?

Yes indeed, Elizabeth. The game is rigged.

"The game is rigged."

References

David Leonhardt. Getting Into the Ivies. New York Times, April 27, 2014, Sunday Review Section, p. 1.

Gretchen Morgenson. From Outside or Inside, the Deck Looks Stacked. New York Times, April 27, 2014, Sunday Business Section, p. 1.