Relevant and even prescient commentary on news, politics and the economy.

A Wake-Up Call for Students

Guest Author: Alan Collinge, StudentLoanJustice.Org,Both Alan and I have written various posts on the student loan crisis. Alan has been featured on Angry Bear Blog from time to time.

If you are in college and looking for something worthy to fight for today; as a student, you should consider the student loan issue. Student loans and how they are administered are the national injustice of our time reaching threatening proportions and impacting the livelihood of young adults going forward. While at first glance, the problem appears complicated, confusing, and overwhelming; it is actually quite simple and its debt genesis hearkens back to the creation of this country. This problem transcends partisan and cultural divides and could serve to bring together those on the left and right on campus.

George Washington, Thomas Jefferson, and others were in debt up to their eyeballs to British banks and merchants. They came to understand how a lending system could be used against the citizens. Of course it was not just the Founders who were being exploited, many early settlers were indebted to English banks as well. John Adams famously remarked;

“There are two ways to enslave and conquer a country. One is by the sword. The other is by debt”

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When the Founders created the Constitution, they made it a point to reflect on bankruptcy rights prominently. Few people realize that a uniform bankruptcy system is called for before the power to raise an army or a navy, ahead of the power to coin currency, and even ahead of the power to declare war in Article I, Section 8 of the Constitution.
Obviously, bankruptcy rights were very important to these men.

Free men are not forced into any type of behavior by the government that We The People established and ordained. The government is to serve the people – not to force them into servitude and obedience. The people are sovereign, as the people came before the government and the Constitution that gave rise to the government.

Adam Smith, the founder of free market economics provided the basis for western economic theory, was compelled to advocate for bankruptcy protection as a means to encourage entrepreneurship, risk taking, and also a means to compel good faith in a lending relationship.

When an individual or firm goes bankrupt, a legal process is instigated to discharge debts that cannot be repaid. In former times such debtors might have been put into a debtors’ prison and languished there for years. The process weighs assets against liabilities and allows the debts to be discharged at some fraction of their nominal value, leaving the debtor free of the burden, albeit subject to rules of financial behaviour and with a blemish on their credit record which can last for years.

Student loans violate longstanding economic principles and as such the beliefs of the Founders. Today, Congress has placed conditions on student loan bankruptcy so severe; that of 169,000 people with student loans who filed for bankruptcy in 2014, fewer than 20 received relief. When our legislators first restricted the right to student loan bankruptcy in the 70’s, some members warned that such a move had dire constitutional implications, but their concerns went unheeded. As one University of Connecticut expert Philip Schuhman testified to Congress:

” students should not be singled out for special and discriminatory treatment. I have the further very literal feeling that this is almost a denial of their right to equal protection of the law. Nor do I think any evidence has been presented that these people, these young people just beginning their years on the whole should be singled out for special, and as I view it, discriminatory treatment. I suggest to you that this may at least in spirit be a denial of their right to equal protection with the virtual pole star of our constitutional ambit.”

Today, student loans are the only type of loan in this country from which bankruptcy rights have been removed leading to consequences so severe as to result in a form of peonage. Despite peonage being made illegal after the civil war in 1867, it still flourished in the form of sharecropping with former slaves and poor farmers farming plots of land owned by others. Sharecroppers supposedly received a percentage of the profits from sale of grown crops. The sharecroppers were forced to take out relatively large loans just to get by and meet daily expenses, buy seed, rent land, and pay the interest rates imposed on them by landlords.

Also in the past African Americans could be accused of falsely owing money or trivial sums, given sham trials and quickly sold off by the courts into a privatized system of debt slavery to pay back debt. The peonage contracts contained enslaving terms and conditions, allowing the employer to trade, confine, whip and beat workers as long as the debt was deemed unpaid, which could practically last forever.

While not as severe as peonage, students in default are denied access to federal programs and unemployment benefits. Social Security and employment wages can be garnished leading to diminished lifetime earnings and poverty. All of these conditions have a severe impact upon the overall economy as younger workers do not achieve their full earning potential.

The student loan industry is willfully predatory and profitable for the banks who lobbied intensely for the removal of bankruptcy protections and work hard to keep their monetary advantage. As Mr. Potter would say; “The bank always get paid” and this comes no matter what the terms or conditions of the loan are.

(run75441) In my own discussion with a former University of Michigan lobbyist who was regaling me after I dared to make a statement to Michigan Senator Debbie Stabenow about what her stance and actions were with regard to student loans. “There is IBR and Repaye which are programs allowing payment back on student loans based upon income.” These programs are mostly failing because of one rule requiring the yearly application to the program rather than an automatic re-up into the program. The re-up is required to report income a factor which is automatically done for Medicare via computer systems. The manual yearly application for the programs was bound to be a failure just by this alone.

It was not just the banks cashing in on the removal of consumer protections. In 2012, the federal government booked over $50 billion in profit on the lending system and this has increased in more recent years. What is disturbing is White House Budget data showing a profit being made on defaults. Think about this: where a credit card company is thrilled to get back a dime on the dollar for their defaulted accounts; the federal government is actually getting back more than a dollar in return. This is a defining hallmark of a predatory lending system and unfortunately for the students, the Department of Education sits on top of it all doing everything it can to perpetuate this situation. Department of Education lawyers fight tooth-and-nail behind the scenes to deny legitimate bankruptcy. This form of government enforced peonage spans many presidents and Congresses and both political parties going back to the seventies.

In 1998, when Congress made bankruptcy permanently unavailable for the overwhelming majority of borrowers, the nation owed roughly $100 Billion in student loans. Today that has exploded to $1.5 Trillion. By the end of this year, nearly one in four borrowers will have defaulted on their loans. People’s lives are being devastated. Families are being torn apart, particularly where cosigners are put on the hook for their kid’s exploded loans. People are fleeing the country, and some are even committing suicide as a result of their student loan debt.

If you think you don’t need to worry because there are forgiveness programs in place, you are wrong. With 57% already kicked out of them income based repayment programs are failing misrably. Assuming the programs are not ended by Secretary of Education Betsy DeVos, I estimate only 10% will be successful and have their loans forgiven and still potentially taxed as income. The rest will be disqualified from the program and left owing far more than when they graduated.

Alan Collinge is the Founder of Student Loan Justice Org and author of “The Student Loan Scam” (Beacon Press).

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On The Relationship Between Wahhabism And Salafism

On The Relationship Between Wahhabism And Salafism

I apologize if this seems an esoteric topic, but it is one that seems to be a matter of seriously contentious dispute, as well as one that Iis relevant to various controversies and issues in the Middle East now. It is triggered by the biggest argument I have ever had with Juan Cole, whom I usually agree with, and indeed I agree with the vast majority of his recent  post advising Saudi Arabia on how they can make themselves look better to the rest of the world, which includes such obvious items as allowing women to drive (the last of 7).

My disagreement with him was over a line just dropped incidentally that he would later defend ardently, that the official Saudi theology/ideology of “Wahhabism” is “not Sunni.” I challenged this, pointing out that 1) the Kingdom of Saudi Arabia (KSA) officially uses as its official Shari’a law code the Hanbali code, one of the four Sunni Shari’a codes, and 2) that KSA is currently claiming to lead a global Sunni movement against the global Shia movement, even if this may well boil down simply to a local power struggle between KSA and Iran. I think Juan agrees with those two points, and also that Wahhabism and Salafism are not identical, in contrast to claims by many ignorant commentators.

I now accept that Juan is right about certain matters I differed with him about. The founder of Wahhabism, Muhammed ibn Abdel-Wahhab, who formed an alliance in 1744 with the founder of the Saudi dynasty, Muhammed ibn Sa’ud, did not make as his primal demand that the very strict Hanbali code be adopted by the Saudi family as part of their alliance. He had his own idiosyncratic theology that mostly attacked local practices such as worship of saints and their shrines. And he denounced the existing Sunnis and all other Muslims who did not follow his version of Islam to the point that they could be killed, although it seems that his worst wrath was against Shia and Sufis. But his stance led and justified the view by many that his followers were not proper Sunnis, even though later they would adopt the proper, if extreme, Hanbali Shari’a code, although that would be following ibn Hanbal’s follower, ibn Tamiyyah more specifically when they did so by a century or so ago. It was also the case that from the beginning Abdel-Wahhab’s views were close to those of advocates of the Hanbali code, who included members of his family, including his influential grandfather.

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2.5 cheers for 2016’s new high in real median income!

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Douglas F. Dowd Is Dead

Douglas F. Dowd Is Dead

Douglas Fitzgerald Dowd has died at age 97 in Bologna, Italy.  A scholar of Thorstein Veblen and expounder of a radical view of US economic history that strongly influenced Howard Zinn and Daniel Ellsberg, among others, he was also a serious political activist.  After serving as a bomber pilot in the Pacific in World War II, he managed the 1948 presidential campaign of Progressive Party candidate Henry Wallace from Berkeley, CA, his home town, he later was a major organizer of anti-Vietnam War sitins and campus teach-ins and was vice presidential candidate with Eldridge Cleaver in 1968 on the Peace and Freedom ticket.  His best known book was probably Blues for America (1997).  He taught at Cornell, Berkeley, San Jose State, Johns Hopkins, and the University of Modena in Italy, where he was lecturing until well into his 90s.  His New York Times obituary is here, which has many more details.

I have old and deep personal connections with Doug.  When I was a kid living in Ithaca, NY in the 1950s, his son, Jeff, was my best friend, and I got to know Doug from that perspective.  I came from a conservative family, but Doug spoke directly and openly about his views to me as if I was an adult. Hid kids, Jeff and Jenny, called their parents by theiri first names, Doug and Zirel, the only family where I saw such behavior.  Doug made me aware of many of his views about the nature of the US and its society. I would move away to Madison, Wisconsin in 1963 to enter high school, but I would remain in contact with Doug off and on until quite recently.  I regret that I did not visit him recently when I was in Florence for an extended period, with him living in Bologna, Italy, not far away, where he was living with his third wife, who owned a feminist book store.  He was always honest and direct and forthright in his views and expressions.

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How to kill Social Security in 2 easy steps

How to kill Social Security in 2 easy steps
Here’s Kevin Drum advocating for step 1:

 the best way to address retirement security is to continue reforming 401(k) plans and to expand Social Security—but only for low-income workers. Middle-class workers are generally doing reasonably well, and certainly as well as they did in the past. We don’t need a massive and expensive expansion of Social Security for everyone, but we do need to make Social Security more generous for the bottom quarter or so of the population that’s doing poorly in both relative and absolute terms. This is something that every liberal ought to support, and hopefully this is the bandwagon that President Obama in now on.

Step 2:
Now that 3/4 of the population will be paying into a system to transfer their income to the bottom 1/4, you have instantly created a majority constituency that will benefit from killing the now-welfare program.
Why does Kevin Drum want to kill Social Security?

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Homicides: Victimizers and Victims

Last year in Chicago:

Among the Sun-Times’ findings, based on a review of police and Cook County medical examiner’s reports, court files and interviews:

• The vast majority of those killed in Chicago in the first half of this year — 90 percent —died from a gunshot wound.

• Seventy-two percent were African-American men, their average age 29.

• Four out of five had faced criminal charges in Cook County at some point, mostly for drug offenses — the leading cause of arrest in Chicago.

• Two out of five had drug convictions.

• More than a quarter had been convicted of a violent offense or illegal gun possession.

• Domestic conflicts, many involving mental illness, were involved in at least 24 of the deaths.

• At least four were killed by stray bullets. Others were shot while in the company of people who were targeted.

• The reasons behind other killings remain a mystery to the police.

Chicago Police Department officials say the findings reinforce that most of the city’s gun violence involves a relatively small group of gang members and drug dealers.

Aiming to stem that violence, they’ve been sending teams to meet with gang members flagged as being likeliest to end up a shooting victim or a shooter, based in part on an algorithm that takes into account factors like whether a person has ever been shot, has been convicted of a gun crime, is on parole or has been picked up by the police with anyone who fits such criteria.

“Today’s offender is tomorrow’s victim,” says Christopher Mallette, executive director of Chicago Violence Reduction Strategy, a not-for-profit group that organizes the visits. “They flip jerseys all the time.”

Also a bit out of date, from Wisconsin Public Radio:

As the halfway mark for the year 2014 is nearly here, the tally of gun-related homicides in Wisconsin currently stands at 50. However, there appears to be one constant in these numbers and that’s the criminal records of both the perpetrators and victims.

The two most recent gun deaths involved Kwata Shields, 19, who was shot on Milwaukee’s South Side at a house party last Saturday. The second was Robert Washington, 20, who was allegedly shot by his father on Thursday during an argument in the Milwaukee suburb of Glendale.

Almost two-thirds of the fatal shootings in the state have taken place in Milwaukee. The others are scattered around 15 different cities and towns. In almost all cases, however, both victims and alleged perpetrators have criminal records.

Mallory O’Brien, of the Milwaukee Homicide Review Commission, tracks those numbers for the city of Milwaukee.

“(About) 94 percent of our victims have an arrest history and 93 percent of our suspects have an arrest history,” O’Brien said.

O’Brien said the same percentage is true for non-fatal shooting incidents. There’s been an increase in those numbers as well. By the end of June of last year, there were 204 cases and the count at the six-month mark this year, there have been 248 incidents — a 21-percent increase. She said there’ also been an increase in the number of shooting incidents with multiple victims.

In Baltimore:

But police have also said that some of the city’s residents most vulnerable to violence were also perpetrating violence— including known gang members and others heavily involved in the city’s violent drug trade.

“The driving forces behind the murders have remained the same and we’ve been successful at identifying some of these trigger pullers and getting them off the streets. We’re doing as much as we can with that group of people. It’s a vulnerable group, and I’ve said this a number of times,” Police Commissioner Kevin Davis said in November. “There are both perpetrators on that list and very likely victims on that list.”

The new data on the 2015 victims seems to bolster Davis’ claim that many victims were previously caught up in crime.

According to the analysis, nearly 90 percent of the 344 victims in 2015 had a prior criminal record. Of those, 80.2 percent had a prior drug arrest; 60.8 had been arrested for a violent crime; and half had a prior gun charge.

The average victim had been arrested 13 times before, and 26.2 percent were suspected gang members, the report said.

I stumble on treating alleged shooters as a “vulnerable group.” To me, the real vulnerable group are the other residents in the neighborhoods who are terrorized by the shooters or even get killed in the crossfire. Think of it in terms of people who get lung cancer. The fact that someone smoked 3 packs a day for a few decades doesn’t mean he/she in any way deserved to get lung cancer, but the cases that tend to elicit more sympathy are those of the people who never smoked, and especially the kids.

Now, from what I can tell, there are only two ways to reduce the number of “second-hand smokers.” One is to reduce the number of tobacco users. The other is to keep tobacco users apart from everyone else. With that in mind, what are realistic ways to reduce the carnage in some of our inner cities?

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New State Laws Passed in California

Election Tax Returns

In an effort to force our present president when running for re-election and future presidential candidates to release income tax returns, California passed SB249 Disclose Act. California became the first state to require presidential candidates to release their tax returns in order to appear on the state ballot.

Lawmakers sent Gov. Jerry Brown AB249 Friday requiring candidates to publicly share five years of returns.

This comes after President Trump’s refused to release his tax returns during the 2016 campaign. His actions sparked similar legislation in dozens of other states. The documents reveal income sources, tax exemptions, charitable donations and potential financial conflicts of interest.

Until Trump, every major presidential candidates has released their returns for decades.

Criminal Background Checks

In new legislation, California employers could not initially ask during the interview process if potential employees have a criminal history. AB1008 Employment Discrimination: Conviction History bill was sent to Gov. Jerry Brown. The California Assembly on Friday gave final approval to a bill that supporters say would mean more ex-felons could get jobs and stay out of trouble.

Democratic Assemblyman Kevin McCarty of Sacramento says AB1008 would allow employers to ask about criminal histories later in the process. It requires businesses with five or more employees to inquire into and consider convictions only after the applicant has received a conditional job offer.

California joins nine other states with similar restrictions on asking about criminal history. There was no spoken opposition as the Assembly agreed with Senate restrictions on a 41-25 vote.

Campaign Advertising

California voters would know more about who’s paying for campaign advertising under AB249 just sent to Gov. Jerry Brown. AB 249 California Disclose Act requires ballot measure and independent expenditure committees to display the names of the top three donors.

AB249 also requires a clear disclosure of donors behind campaign committees having misleading names. The California Clean Money Campaign sponsoring the legislation said: “no other state disclosure laws reveals to voters more information about donors who increasingly hide behind a series of bland sounding political committees and groups to remove any identity of their contributions supporting candidates or new laws.”

Supporters say the bill will help voters make better decisions based on greater information.

Republicans say the bill should require labor unions to disclose individual members who contribute. Only the union would be listed under the bill and not its members.

The Assembly gave final approval on a 55-12 vote.

State Sanctuary Bill

California approved SB54 California Values Act, a “sanctuary state” bill Saturday that would limit how local and state police can interact with federal immigration agents. The bill is intended to provide more immigrant protections in the state which are already among the toughest in the nation.

It will now be considered by Gov. Jerry Brown, who announced his support after the top state Senate leader agreed to water down the bill and preserve authority for jail and prison officials to cooperate with immigration officers in many cases.

It looks like some states are doing something to counter big money, Republican values, and Trump.

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Trump Cutting Deals with Democrats

In Cutting Deals With Trump, Are Democrats Walking Into a Trap?

Over the weekend the mainstream press published a flurry of articles about Donald Trump, the pragmatic independent outsider who has no loyalty to any party and will work with anyone to Get Things Done. This excited reaction was in response to the president’s agreement to raise the debt ceiling and fund disaster relief with the help of Democrats. But that’s nothing compared to the delirium that broke out after he had dinner with Nancy Pelosi and Chuck Schumer on Wednesday night and the Democrats announced that they had reached agreement to legalize the Dreamers without funding his Big Beautiful Wall.

That would be a big win for the good guys, to be sure. Of course, when it comes to Trump, trusting him on a handshake has rarely turned out to be a wise decision for anyone, so we’ll have to see. Heather Digby Parton

Dan, picked this up on Truthout and sent it to me. Guess I am not the only one who likes to check-out the horse’s mouth for the truth.

Everyday which goes by secures healthcare in the US even though Trump and Repubs have threatened the CSRs and had previously blocked the Risk Corridor Program causing premiums to increase, insurance companies to leave the exchanges, and Coops to go bankrupt. Their actions confuses people as they see premiums increase and believe it is because of the ACA. The increase is still compensated for by an increased subsidy to cover the premium increase. This part is not mentioned and people blame the ACA, which is the objective of Republicans and Trump. Even so and at particular cost risk is the individuals market with those making >400% FPL who are not covered by any subsidy.

A flurry of activity by Republicans could still endanger The ACA using Reconciliation requiring 51 votes. McCain is in on the Graham – Cassidy bill.

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Why a Case Against a Dark Money Charter School Group Is Great News for Democracy

Via Alternet:

Why a Case Against a Dark Money Charter School Group Is Great News for Democracy

Billionaire charter school backers in Massachusetts wanted their identities kept secret. In one of the most important decisions ever about dark money in politics, a Massachusetts charter school advocacy group has been ordered to make the names of its donors public, and pay the largest campaign finance fine in state history. The case is likely to reverberate across the nation.

This week, the Massachusetts Office of Campaign and Political Finance (OCPF) exposed the charter school advocacy group Families for Excellent Schools, not as the education reform group of its own masquerade, but as a dark money front designed to hide millions in contributions from plutocrats. The donors, who sought to keep their identities secret, spent big on a ballot question to dramatically expand charter schools in the state; voters rejected itby a wide margin in November.

OCPF reached a Disposition Agreement with Families for Excellent Schools that required the organization to register as a ballot committee and to admit that it had raised (and spent through the Great Schools Massachusetts ballot committee) over $15 million from donors “without disclosing the contributors, and by providing funds to the GSM Committee in a manner intended to disguise the true source of the contributions.” (Press release here).

“Intended to disguise the true source of the contributions.” Marinate in that phrase for a bit.

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