It’s been several years since our devastating economic collapse, and the financial institutions responsible seem to be among the only companies recovering. Families, unions and even cities continue to declare bankruptcy, while a wildly unpopular obstructionist congress prevents any real reform from being enacted. Amid all this, a singular voice of lucidity has emerged in the Senate, diligently attempting to hold overt complacency and corruption to task.
Senator Elizabeth Warren’s (D-Mass.) admirable résumé and history of public advocacy legitimizes her frequent and passionate battles against the major banks. A recent Quinnipiac poll found her popularity as a potential candidate ranked in third place, behind Clinton and Christie. There are issues she may need to address, however, not least of which is her position on reducing student loan interest rates. Warren’s inclination to help students lower the rates at which they pay back exorbitant college tuition fees is a misguided attack against the fruit of a poisonous tree. The real target should be the absurdly high prices universities are allowed to charge in the first place, due to our government subsidies.
Warren’s home state of Massachusetts mimics the “Big Oil,” “Big Tech,” or “Big Banking” industries of Texas, California, and New York, respectively, with its own significant industry: “Big College” — there are dozens of major universities in the city of Boston alone. Her political objectivity seems mildly skewed by the institutions which hire thousands of her state’s employees, and generate billions of its tax revenue dollars, creating a singular blight of subjectivity on an otherwise clear road to the presidency.
Many of President Obama’s most passionate supporters continue to blame the petulance of Koch-backed Tea Party candidates for hindering and compromising his ability to deliver on political promises. But there are glaring hypocrisies in the way he’s overseen his administration’s security policies that cannot be blamed on Republican opposition. As a Senator, Obama warned us against the dangers of abusing the PATRIOT Act, and as a President, he proved his own fears were justified by abusing those very same powers.
As a result, many of the idealistic voters who backed Obama have vaulted into their adulthood with a jarring and sudden dose of bleak political cynicism. They are reticent to trust another inexperienced senator, solely on the basis of passionate opinions and lofty promises.
To this end, Warren’s professional history lends her some much-needed legitimacy and authority. As a former Harvard Law school professor specializing in bankruptcy, Warren’s vigorous consumer protection advocacy led to the formation and establishment of the Consumer Financial Protection Bureau. After the 2008 financial collapse, Warren served as chair of the Congressional Oversight Panel, overseeing TARP. As a Senator, she began her career with an almost instant and ferociously informed attack on the financial institutions and regulators whose malfeasance caused the 2008 collapse – a righteous indignation that’s been sorely missing in Obama’s cool-handed approach.
We have good reason to want a financial sheriff in the executive seat. Leaked emails revealed that both Moodys and Standard & Poors accepted money to generate higher ratings prior to the financial collapse. The ludicrously arrogant former Goldman Sachs trader, Fabrice Tourre, stands to be one of very few people facing any consequence for their toxic manipulations of the fiscal markets. When HSBC was revealed to be laundering billions of dollars for terrorists and drug cartels, the punishment was a fee rather than any criminal prosecution by the Justice Department.
Deregulation is among the many reasons we’ve grown powerless to hold financial institutions accountable, especially now that they’ve grown so vast their profits out-gross most nations. A president eager to take a sharp scalpel to this congealed monstrosity of financial greed and corrupt stagnation would be a very welcome change.
But Warren’s willingness to attack the banking industry’s glaring flaws doesn’t diminish those she’s ignoring in her own home state. The battle over student loan interest rates is a display of utter conceptual nonsense and political theater. There are two simple truths that need to be accounted for when discussing the university system in the U.S.:
1. Government-backed student loans subsidize the artificially inflated prices of going to college.
2. Not everyone should be going to college!
Regardless of the interest rates we secure as students to pay back our loans, we must also realize that college is so expensive in this country is due to artificially inflated demand (with supply remaining limited.) By providing subsidies in the form of student loans, the government increases the number of loans people take, making it cheaper for students to consume, and churning demand further. Providing education is not a bad thing, but the government is essentially allowing colleges to charge as much as they like, with no pressure to decrease their prices. Most students don’t factor the cost of college into their decision-making, and don’t realize the mathematics they’ve entered into until their first loan payment is due. Even President Obama was haunted by his debt well into his adult career.
It’s easy to spot a skewed distortion in the market. Universities that don’t accept federal loans, on average, have tuition that’s half of their peer institutions. So it’s no surprise schools are willing to back Warren and her proposal to keep interest rates low, while wholly unlikely to self-police their costs and suggest lowered tuition. Why would they? That would be like asking oil companies to self-police their pollution. It’s why we even have occurrences of universities getting kick-backs to sell students textbooks.
If I have to pay cash for something, I’m limited by how much I have. If I get a loan to pay for something, I am open to more possibilities. If everyone is getting a great loan, demand perpetually goes up alongside the profits for the product being sold (education), reaching an apex where consumers (students) begin to question whether the product is even worth the cost. This is similar to the housing bubble that Warren is so eager to critique.
Which brings us to the second point. Despite all the woes we hear about unemployment in this country, there are literally millions of blue collar jobs that are available to be filled. But we have a generation of college-educated millenials who believed university was a job-placement center for corporate positions that would be waiting for them after graduation. We were told to get a degree so we wouldn’t have to flip burgers for a living, and now we’d be hard-pressed to even find a job flipping burgers. But there are many high-paying jobs that don’t require degrees. According to CNN and Salary.com, here are a few of the positions you can pursue without a college diploma and their annual income: air traffic controller – $108,00; nuclear operator – $75,600; registered nurse – $64,700; construction manager – $95,956. The list goes on.
This educational distortion is the central flaw in Warren’s political philosophy. Beyond that, her voice is a much needed presence in the complaisant pig-trough that is Washington. Perhaps she needs more foreign policy experience before she can act as a president, and perhaps she is better suited for a domestic policy-oriented cabinet position. If she isn’t a significant player in this cycle, she’ll no doubt make an significant appearance by 2020.
But in the meantime, her intellectual presence will be a much needed force in sweeping out the idiocy clogging up our Congress. Whereas most people feel outrage-fatigue, and subdued acceptance over the banks' overt corruption, Warren still fights the invasive tentacles of their greed with righteous indignation. If she can only scrutinize her state's central industry with the same level-headedness, she'd be hard-pressed to find any real competition in her presidential run.