Why Surf Culture Desperately Needs More Diversity

A friend of mine who owns a surf brand recently received an absolutely bonkers series of racist emails. The sender purchased my friend’s product online, then somehow figured out his ethnicity after the fact. Before the order arrived, the customer sent an email canceling his purchase, citing my friend’s ethnicity as the reason. {snip}

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{snip} But my friend’s run-in with at least one surfer’s ethnic phobias did force me to realize how much I, a white guy from a mostly-white Californian beach town, have overestimated the shared experience of all surfers. All part of the same tribe, right? Clearly, that’s also not remotely true.

It’s clear that surf culture does have a problem, and that problem stems from a lack of diversity within our ranks. “History of Surfing” author Matt Warshaw pointed out in a 2015 essay published on Surfer.com that, as a pastime developed largely by brown-skinned Polynesians (as well as Africans in some places and Peruvians in others), surfing has always been multi-cultural.

After all, it was whites who were forced to “break surfing’s glass ceiling in terms of race, a hundred-plus years ago, in Hawaii,” says Warshaw. For surfers, “Hawaii is always there in the back of our minds. Play the race card, in other words, and you answer to Duke Kahanamoku.”

That historical aspect may very well be true, but it doesn’t at all address the issue that surfing today, at least in the world’s two most globally influential surfing nations — the USA and Australia — is overwhelmingly white and upper middle class. This is true in countless lineups, where you’re likely to paddle out and find a mostly homogenous pack of white people surfing on expensive boards, wearing expensive gear in areas with a high cost of living. If you can’t afford it, you ain’t surfing.

I called Jeff Williams, co-president of the Black Surfer’s Collective (an organization that brings inner-city black kids in L.A. to the beach) to talk to him about diversity in surfing. “I’ve never really had problems with actual racism in surfing,” Williams said. “I’ve surfed all over the world, and everywhere I’ve ever been, most surfers are pretty cool.” But he does see the lack of minorities in the surf in the U.S. as problematic. “Look, anytime you try to talk about diversity in surfing, it all boils down to access,” he said. {snip}

Williams thinks {snip} it would take something like a “surfing Tiger Woods” to get inner-city kids to start paying attention to surf culture in a real way. But if we did gain more diverse surf stars bringing different voices and experiences to the table, the mainstream surf culture could only change for the better. Think about The Brazilian Storm: the South American vanguard brought fiery competitiveness and legions of exuberant fans to the World Tour, giving professional surfing a much-needed injection of passion.

But tease that out to include more people of color and more people coming from communities not typically associated with surfing. What styles would emerge and what influences would inform them? What might surf art look like with if it was inspired by a surf experience that differed from the easygoing, middle-class beach life? How might board design evolve if more diverse voices were able to participate in the conversation?

I don’t have the answers, but you don’t have to look very far to find parallels in other sports. Skate culture is far more dynamic because of the cacophony of viewpoints, with universally-acclaimed skaters of diverse races and socioeconomic backgrounds adding to the melting pot. Surfing can only gain from more perspectives adding to our own understanding of what it means to be a surfer, and from embracing those who didn’t come to the beach easily, but made their way nonetheless.

{snip}

The post Why Surf Culture Desperately Needs More Diversity appeared first on American Renaissance.

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Of Morality And Marshmallows

The Atlantic reports on a new study suggesting that the famous “marshmallow test” is unreliable as a predictor of future economic instability. Excerpt:

In the case of this new study, specifically, the failure to confirm old assumptions pointed to an important truth: that circumstances matter more in shaping children’s lives than Mischel and his colleagues seemed to appreciate.

This new paper found that among kids whose mothers had a college degree, those who waited for a second marshmallow did no better in the long run—in terms of standardized test scores and mothers’ reports of their children’s behavior—than those who dug right in. Similarly, among kids whose mothers did not have college degrees, those who waited did no better than those who gave in to temptation, once other factors like household income and the child’s home environment at age 3 (evaluated according to a standard research measure that notes, for instance, the number of books that researchers observed in the home and how responsive mothers were to their children in the researchers’ presence) were taken into account. For those kids, self-control alone couldn’t overcome economic and social disadvantages.

The failed replication of the marshmallow test does more than just debunk the earlier notion; it suggests other possible explanations for why poorer kids would be less motivated to wait for that second marshmallow. For them, daily life holds fewer guarantees: There might be food in the pantry today, but there might not be tomorrow, so there is a risk that comes with waiting. And even if their parents promise to buy more of a certain food, sometimes that promise gets broken out of financial necessity.

Maybe so. But might it also be the case that children raised in more affluent homes will have been taught the value of resisting their impulses? I say this because one of my own children has had a very demanding sweet tooth from earliest childhood. He is also impulsive by nature. It has taken years of effort on the part of his mother and me to train him to say no to his impulses — not only for sugar, but, as he has gotten older and started earning spending money, his enthusiasms for buying things that strike his fancy. Many times I have pondered the difficulty he is going to have managing his money if he doesn’t get this impulsiveness under control. He’s a very good kid, highly moral and responsible, but impulsiveness is his Achilles’ heel.

He’s not being raised in poverty. We are middle class people, but culturally I guess that puts us with more in common with the affluent than not. Our impulsive child has been raised in a stable household — materially and emotionally — so there are no environmental factors that nurture his impulsiveness. From an Orthodox Christian point of view, this is simply one of his passions, something he has to struggle against. I have my own particular passions (anger and gluttony). Orthodoxy teaches that life itself is a struggle to crucify the passions and order ones desires towards the will of God. There is nothing wrong in principle with wanting to eat a marshmallow, but if your reason and your will are overcome by that desire to eat a marshmallow, you are weak, and can fall into sin. The regular fasting that Orthodox Christians do is designed to train the will to desire what God desires for us, not what we desire for ourselves.

Anyway, all of that is prelude to what I want to tell you. Last night, I was at a dinner party with some friends. One of them, N., told a long story about a local carpenter she and her husband had hired to do some renovations on their house. I won’t tell the story in depth, because the story is hers to tell, and she’s a writer. The gist of the story is that N. and her husband have been working with this guy for a long time — it’s a big project — and have gotten to know him well. He’s working class, and economically quite precarious. N. said the man has become a friend, and that she and her husband have been working hard to help him stabilize his life.

N. said — again, I’m summing up, but the details are sort of breathtaking — that the carpenter’s personal life is a study in chaos. He cannot grasp that he has the power to determine future events by the choices he makes today. A sense of moral agency totally escapes him. He sees N.’s ordinary family — they have kids — and thinks that they are simply one of fate’s winners. N. talked about the extraordinary lengths she and her husband have gone to befriend and to help this man, but how ultimately it has been futile. No matter what they say to him, no matter what they do for him, he cannot get it together. And he is leaving all kinds of chaos in his wake (several wives, kids, etc.).

I told N. that my wife and I have been in the very same situation, trying to help someone just like that who had become a friend … and in the end, concluding that it was futile. I wrote about it in the past on this blog: how I had gone to my lawyer, offering to pay him to represent this impoverished friend in a particular case. Lawyer said he would take my money and meet with the friend, but that in his lengthy experience with these cases, he could tell me that I’d be wasting my money and his time, because my friend would not follow through. It’s in the nature of people who get themselves into these kinds of situations, he said, to keep doing what got them into that situation in the first place. I told him I would be willing to take that chance to help her.

Next time I saw this friend, I told her to make an appointment with Lawyer X., that he would be willing to advise her, and that I would pay the bill. She thanked me profusely, but said that wouldn’t be necessary that she had decided to … well, that she had decided to keep doing the same stupid thing that got her into this bind in the first place. The country lawyer’s practical experience in dealing with the poor was wiser than my heart-on-the-sleeve idealism. Not for the first time did I feel like a character in a Flannery O’Connor story. (My future epitaph: “Call me Azzberry”.)

At dinner last night, my friend and I dwelled on the intractability of human nature in cases like this. She said that she had to conclude that a stable family life in childhood provides psychological goods that cannot be given through any other way. There aren’t enough government programs, personal charitable efforts, or anything else to compensate adequately for a chaotic childhood. My friend was certainly not saying that we can wash our hands of the responsibility for our neighbor’s welfare, but she was concluding — accurately — that we have to recognize the limits of our ability to change the lives of others. She was also saying that her experience with the carpenter made her more fully aware of how important it is to do everything she can to give her own children a stable home life.

Notice that I’m not saying — nor did I hear her to say — “affluent” home life. My folks never had a lot of money. We were an ordinary working-class to lower-middle-class family. But the gift my mother and father gave me of an orderly, stable childhood was priceless, I now see. How did they do it? They were both imperfect people who endured their share of difficulties in marriage, caused by their own flaws, as well as a period of economic stress. My father is no longer with us to discuss the matter, but the truth is, neither one of them would have been given over to much self-reflection on the question. They were the kind of people who would have simply said, “We made a vow,” and left it at that. For them, that was reason enough to stay together — that, and they always made it clear that the needs of us kids came before their own. That was just how my folks went through life. Not to get too philosophical about it, but for them, that was the Tao.

That wouldn’t have guaranteed stability in my family’s or my late sister’s, but they gave us such a good model of how family was supposed to work. Again, I don’t want to hold my mom and dad out to have been perfect. I don’t think there are any perfect families, and certainly mine had its particular flaws, some of which had unfortunate long-term consequences. That said, I am so very grateful to my parents for holding things together, and showing my sister and me that it is possible to build that kind of life, even when you don’t have much money.

My father was the chief breadwinner in our household, and, because they were a traditional 1950s-era couple, he was the one who dictated how our financial resources would be handled. I find this interesting with relation to the Atlantic article because having grown up very poor in the Great Depression, he ought to have been shaped by the experience of inconstancy in a particular way. Remember, the Atlantic writer said:

There might be food in the pantry today, but there might not be tomorrow, so there is a risk that comes with waiting. And even if their parents promise to buy more of a certain food, sometimes that promise gets broken out of financial necessity.

That’s how my father grew up, but that same experience made him far more likely to do what he could to hedge against chaos. He talked to Ruthie and me a lot about these things, relating him to his childhood. His own father was away from home for most of my dad’s early childhood, entirely because he had to work and send money back to support his wife, children, and elderly mother, who lived in the household. That sense of vulnerability made a profound impression on my dad, who was determined that his children would not feel it, if he could help it.

Daddy wasn’t unique in that. What I can’t quite understand today is why his response to childhood poverty and insecurity was so very different from what is normal today. That is, Daddy’s response was to live as an adult in such a way that he was less vulnerable to that chaos, and in which his own children were made less vulnerable to the chaos that would have come had outside pressures broken the family apart. I’ve written many times in this space about how he had deep compassion for people who were poor and suffering victims of circumstance, but also something bordering on contempt for people who were poor and suffering, but who always blamed others, or fate, for their suffering. He would say, “You can’t do nothin’ for people like that.” This was the opinion of a man who had once been poor, and who had lived his entire life in the same community as poor people, and working with them. Kind of like that country lawyer I mentioned above.

It seems to me that aside from his personal qualities, my father was the beneficiary of a local culture that, for better or for worse, had a strong bias against people living morally disordered lives. I should add that my dad had much more hostility towards middle class and wealthy people who lived that way. “They know better,” he would say. “They don’t have an excuse.” In his case, it wasn’t so much a matter of religion — my dad wasn’t particularly observant — as it was a matter of shame and honor. The culture that shaped my father’s code said it was dishonorable for men and women to live in ways that violated its core moral code. I heard my dad say on a number of occasions, “There’s no shame in being poor,” but he also spoke with stern judgment against men who abandoned their families, people who wouldn’t work, and so forth.

That code could be harsh, but it was more realistic about life than a lot of what passes for wisdom today. I think that has a lot to do with why Jordan Peterson is so popular. He gives to young men a sense of moral agency. Peterson is not Moses coming down from the summit of Sinai, but he talks common sense to a culture that has forgotten it. There has never been a society, and never will be a society, in which somebody can live like a fool and not pay the consequences — and for that matter, inflict consequences on others. You can’t not show up for work and expect to keep your job forever. You can’t ignore your kids and expect that they will grow up to be responsible people. You can’t get loaded every weekend and wonder why your roof is falling in, and won’t fix itself. You can’t allow television and social media to raise your children, and expect that they will be good.  And so forth.

“The world doesn’t owe you a living,” my father would lecture me, usually when I hadn’t done my homework, or failed to do something I was supposed to have done. I suppose this attitude is what made my dad a natural conservative. He couldn’t stand people who were ungrateful and lazy. His basic attitude towards us kids was: I bust my ass to provide for y’all, and I’ll be damned if I’m going to let you waste the opportunities you’ve been given. There was a time in my life when I thought he was so square, but the older I get, the more I see that there really isn’t any other way to live. My dad was keen to help people who were down on their luck, and I see now that he allowed himself to be taken advantage of by some folks with hard-luck stories. Mostly, though, what he was eager to do was to teach people how to help themselves, and to encourage them to do so. For him, this was a matter of natural justice. A society in which people were rewarded even though they did the wrong thing, or failed to do the right thing, was not a just or good society. And doing the right thing always meant subjugating your own desires to the greater good, especially the greater good of your family.

Here’s a funny thing: a few years back, when I was working with the African-American actor Wendell Pierce on his memoir of growing up in south Louisiana, I spent some time speaking with his Uncle L.C. Edwards, the last surviving member of Wendell’s parents’ generation. Uncle L.C. was the same age as my father, and like him, had grown up in rural poverty. I loved the stories of L.C.’s parents (that is, Wendell’s grandparents): poor black farmers who weren’t educated, but who had a very strong religious ethic, and who placed enormous value on education and self-discipline as the only reliable means of self-advancement. Poverty was the enemy of both L.C. and my father, but Lloyd and his siblings also had to deal with Jim Crow. If memory serves, every one of the children of Wendell’s grandparents got educated, and escaped poverty. I’m telling you, the chapter on Papo and Mamo (the grandchildren’s name for L.C.’s parents) is worth the price of the book. Here’s a characteristic excerpt:

One Christmas evening after supper, the Edwardses went to call on their College Point neighbors, to wish them a happy holiday. The kids were startled to go into one house and to see that all that family had eaten for their Christmas meal was potatoes and grits. When they returned home, Papo told the children, “This is what I mean when I tell you it’s important to save for a rainy day. If you put your money aside now, you will have enough to eat well on Christmas.”

Given the man Papo was, if the Edwardses had any food left, he probably took it to that poor family and didn’t tell his own children for the sake of preserving their neighbors’ dignity.

His children remembered Papo as a slow talker but a deep thinker. He never made a quick decision, but acted only after prayer, deliberation, and sleeping on it. Whatever the answer was, he arrived at it through careful reason, not passion. Acting on impulse was the sure way to lose your money, in Papo’s view.

Papo worked for a time in a sugar factory and received his weekly wages in a brown packet. He had a firm rule with himself: Wait twenty-four hours before spending a penny of it. Uncle L.C. said that as a young working man, he thought his father’s rule was silly. You have the money, he figured, so why not enjoy it?

But when he got married and started a family of his own, he understood Papo’s good sense and followed the rule himself. Uncle L.C., who worked at the DuPont chemical plant, has done well through saving and investing over the years. To this day, he credits Papo for teaching him by word and example the importance of being careful with your money and not letting your passions guide your decisions.

Talking with L.C. was like speaking with a black version of my own father. Though he had long been in retirement when I met him, L.C. was always thinking of ways he could make a little money. He told me about how he would take fatherless black boys from a nearby trailer park, and try to teach them something about working to make money and to plan for the future. He told me how sorry he felt for those young men, who had no father in the home to offer them direction, or a sense of responsible manhood.

But his pity had strict limits. Like my own father, L.C. was death on those who wouldn’t work or practice self-discipline. He told me about how his own wife, a retired public schoolteacher, quit her job the very day the last of their adult children no longer needed their help paying for college. She was of a generation for whom education was the most precious thing, their ticket out of poverty and oppression. Today, though, she was worn down by students who wouldn’t work, wouldn’t behave themselves, and parents who blamed the schools and the teachers for their kids’ failures.

American culture is far less friendly to the worldview of those Depression babies like L.C. and my father. Politics and economics are complicated things. You can’t simply apply a moral code to every situation, and expect it to solve the problem. But let’s recognize this: very few Americans in 2018 are as materially poor as my dad and L.C. Edwards were when they came into this world in the 1930s. Is there anybody in America today who is poorer than a black child born to uneducated farmers living in the Deep South under American apartheid? And yet, look what they did with what they had been given! There never will be a society in which family won’t matter, and in which moral self-discipline won’t matter. 

The wealthy, and those with social connections, can absorb a lot more disorder than the less well off can, but money won’t last forever.

The world we have today is wealthier, and in some ways is better able to defray the cost of that disorder. We have more of a social safety net today than we did back then. But this world is much poorer in social capital, which is not something you can raise from Chinese bankers.

There’s a lot of brokenness in this country, and no clear way to fix it. The people my dinner companion and I were talking about last night are white. They live in Charles Murray’s fictional Fishtown. They diverge greatly from the core values and practices of stable middle-class and well-off Americans, in ways that were not true a couple of generations ago. Society has grown far more individualistic and tolerant of non-conformity. This is not entirely a bad thing! But the cost to people who don’t have a lot of social and material capital to begin with has been immense. People love to imagine that if only we brought good jobs back to America, or voted in this or that political party, then these problems would solve themselves. I don’t believe that’s true. That’s no reason not to try to improve opportunities for people, but there are no government programs or private charitable initiatives that can meaningfully compensate for the loss of a sense of moral order and purpose.

Finally, I phrase occurred to me while writing this post, a fragment from something I’d read ages ago. I googled it, and the source turned up here. Here is the excerpt I was thinking about. The writer is talking about the 1950s:

It was a more human world in that it was a sexier world, because sex was still a story. Each high school senior class had exactly one girl who got pregnant and one guy who was the father, and it was the town’s annual scandal. Either she went somewhere and had the baby and put it up for adoption, or she brought it home as a new baby sister, or the couple got married and the town topic changed. It was a stricter, tougher society, but its bruising sanctions came from ancient wisdom.

We have all had a moment when all of a sudden we looked around and thought: The world is changing, I am seeing it change. This is for me the moment when the new America began: I was at a graduation ceremony at a public high school in New Jersey. It was 1971 or 1972. One by one a stream of black-robed students walked across the stage and received their diplomas. And a pretty young girl with red hair, big under her graduation gown, walked up to receive hers. The auditorium stood up and applauded. I looked at my sister: “She’s going to have a baby.”

The girl was eight months pregnant and had had the courage to go through with her pregnancy and take her finals and finish school despite society’s disapproval.

But: Society wasn’t disapproving. It was applauding. Applause is a right and generous response for a young girl with grit and heart. And yet, in the sound of that applause I heard a wall falling, a thousand-year wall, a wall of sanctions that said: We as a society do not approve of teenaged unwed motherhood because it is not good for the child, not good for the mother and not good for us.

The old America had a delicate sense of the difference between the general (“We disapprove”) and the particular (Let’s go help her”). We had the moral self-confidence to sustain the paradox, to sustain the distance between “official” disapproval and “unofficial” succor. The old America would not have applauded the girl in the big graduation gown, but some of its individuals would have helped her not only materially but with some measure of emotional support. We don’t so much anymore. For all our tolerance and talk we don’t show much love to what used to be called girls in trouble. As we’ve gotten more open-minded we’ve gotten more closed-hearted.

Message to society: What you applaud, you encourage. And: Watch out what you celebrate.

The author of those words is Peggy Noonan. She published them in, get this, 1992. Some things have gotten better over the last 26 years. For example, when she published this, David Dinkins was mayor of her town, New York City, and the city would record just over 2,000 homicides. Know how many the city recorded last year, 25 years after the column was published? Only 290.  Progress is real!

On the other hand, I can’t get out of my head the words spoken to me by a professor at an Evangelical Christian college. Speaking about the student body, which is predominantly white, he told me that he didn’t think most of them would ever be able to form stable families. I was shocked by this.These were not kids from the blighted projects or wretched rural trailer parks. Why not? I asked.

He said, “Because they have never seen it done.”

We live in a society in which the moral code that we applaud and the people we celebrate all say: Take the marshmallow now, and don’t worry about the future. This is going to cost us.

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What explains this incredible bubble?

Dear reader,

Our May issue was all about the state of education in America…

And today, we bring you an essay that we couldn’t fit in the magazine… It’s the “missing chapter” that explains the history and rationale behind the incredible rise in student-loan debt.

Read on for more…

Good Intentions and Fiscal Recklessness

By Bryan Beach, financial analyst

Over the past 10 years, students (most of whom have virtually no income) have racked up enormous debts. As of 2017, student debt totals more than $1.5 trillion – the second-largest source of household debt after home mortgages.

Incredibly, that’s what our entire federal government owed a little more than 30 years ago. Virtually all this money was borrowed in only the last 10 years.

The average college student graduates with more than $30,000 in debt… and by his late twenties, has racked up more than $6,000 in credit-card debt. Meanwhile, median earnings for Americans aged 25-34 are $36,000-$40,000.

Can you imagine starting out your adult life with a personal debt-to-income level at close to 100%? What does this say about the state of our economy? What does this say about the state of our culture?

All the signs show that the debt piled on our youth will become another catastrophic bubble in the American economy.

This expansion had nothing to do with real supply and demand or the creation of value. Instead, it was simply an outgrowth of the government’s good intentions and fiscal recklessness…

The government first got into the student-loan business in the late 1950s. President Dwight “Ike” Eisenhower decided the U.S. needed to mint a lot of new engineers and scientists to catch up with the Soviet Union’s first successful efforts in space. So the federal government began providing low-interest-rate college loans to America’s best and brightest…

Then in 1965, Lyndon Johnson changed the focus from national defense to social welfare. As part of the “Great Society” initiatives, the new Federal Family Education Loan Program (FFELP) gave loans to low-income students.

More important, Johnson changed the way the government financed the loans. Instead of loaning students money directly, FFELP loans would be made by banks… but the government would still pick up the tab on defaults. That created an environment where banks could recklessly lend, without any risk of default.

In 1972, Richard Nixon and Congress created the Student Loan Marketing Association (better known as “Sallie Mae”) to service these debts. In 1984, its shares began trading on the New York Stock Exchange. Ultimately, Sallie Mae “privatized,” formally cutting its ties with the U.S. government. As we’ll show you, no entity would profit more from Johnson’s gravy train.

Student loans grew steadily and – for the most part – slowly, until around 1992, when the U.S. Congress decided to include for-profit institutions in the official definition of “institution of higher learning.” Suddenly, “for-profit” colleges were eligible to receive financial aid. Two years later, the for-profit University of Phoenix went public… backed by Wall Street’s money.

By 2000, for-profits were spending tens of millions of dollars lobbying in Washington, and the government began encouraging more citizens to pursue higher education.

How Lenders Can Exploit a Broken System

As the 2007-2008 mortgage crisis showed… when you shield lenders and borrowers from the consequences of reckless behavior, they act recklessly. This is the definition of “moral hazard.”

And as you’ll see, the student-loan program has become one vast moral hazard…

For years, Sallie Mae’s business model churned out mountains of cash. It was impossible not to. Sallie Mae got to borrow from government agencies at miniscule rates, loan it to borrowers for high rates… and if the deal went bad, the taxpayers were on the hook.

Starting in the 1990s, politicians began pressing to eliminate the system’s moral hazard by going back to the Sputnik-era direct-loan system. But Sallie Mae and the for-profit colleges were a powerful lobbying force and fended off legislative changes for nearly 15 years.

By 2010, the gig was up. As part of the Health Care and Education Reconciliation Act of 2010, Congress established that the only entity able to issue government-backed loans would be the U.S. government. That meant Sallie Mae could no longer originate loans backed by the U.S. government. Its gravy train had ended.

To fill the void left by originating FFELP loans, Sallie Mae turned up the heat on another revenue stream – servicing loans held by others. Uncle Sam doesn’t want to be bothered with actually collecting payments. Sallie Mae was happy to do that for a fee.

Sallie Mae quickly recognized that collecting payments on active accounts was a lousy, low-margin business. To really make money in the servicing business, you had to collect delinquent accounts.

This created a new moral hazard… Sallie Mae had no incentive to keep loans current. So it treated the borrowers like dirt. According to various filed and settled claims, Sallie Mae employees intentionally sent confusing or misleading correspondence. They neglected to tell borrowers about loan relief they were entitled to. They called them dozens of times, day and night.

The company’s “bad cop” tactics infuriated borrowers, often making them even less likely to pay. This played right into Sallie Mae’s hands. Once a borrower moved from the “small fee” service-revenue bucket to the “fat percentage” delinquency bucket… Sallie Mae turned on the charm. It brought in its “good cops,” who cooperated with the customers and collected the cash.

It worked. Sallie Mae regularly generated $300 million-$500 million a year in “Contingency Revenue.”

The Tide Turns Against Sallie Mae

Eventually, Sallie Mae’s tactics caught up with it. Frustrated constituents began writing their congressmen. Various media outlets reported on Sallie Mae’s deplorable customer-satisfaction statistics. Thousands of people followed the “I HATE SALLIE MAE” Facebook page. Finally, when it became news that the company had specifically targeted 78,000 military servicemen with its predatory practices… Sallie Mae was officially in Washington’s crosshairs.

The government passed various measures – primarily from 2007-2013 – to ease the borrowers’ burden, including:

  • Allowing students to put off payments if they attend graduate school.
  • Capping the exorbitant “Contingency Fee” plan.
  • Holding servicers accountable for how they treated customers.
  • Implementing “Income-Based Repayment” (“IBR”) and “Pay as You Earn” plans, which cap payments at a percentage of disposable income… or allow borrowers at a certain income level to cease payments altogether. Often, any balances not repaid after 20 years will be forgiven.
  • Allowing graduate students to essentially borrow unlimited amounts under various federal programs (in contrast to capped undergraduate loans).
  • Creating a “not-for-profit loophole,” which forgives the entire outstanding balance after 10 years for any graduate student who becomes a teacher, public defender, or works at a not-for-profit organization.

As always… the government’s best intentions simply gave borrowers license to act recklessly. It shifted the “moral hazard” from the lenders to the borrowers.

Take Bonnie Kurowski-Alicea, a chronic borrower who managed to run up a $209,000 tab earning a doctorate from Capella University in “Industrial Organizational Psychology.” Bonnie couldn’t find a job after earning her online undergraduate degree, so she compounded the problem by piling one useless degree on top of the other. As the Wall Street Journal pointed out, “Dr.” Kurowski-Alicea’s main motivation for earning master’s and doctorate degrees was to postpone repaying her student loans. Her unemployed husband has $75,000 of student loans himself.

Then there’s Virginia Murphy. Her tuition at Tulane Law School was nearly $150,000, and she racked up federal loans of around $250,000 to take care of living expenses. According to the Wall Street Journal, Murphy never had any intention of paying the money back. Loan forgiveness was “the only reason (she) even considered” going to law school. Thanks to the IBR program, Murphy’s monthly payment doesn’t even cover the interest… which means her outstanding balance actually increases every month. As a public defender, her loan balance will be forgiven after 10 years… at which point the outstanding balance will have ballooned to more than $300,000.

The “not-for-profit loophole” was intended for folks like Murphy who, by serving the community as a public defender, is presumably forgoing more lucrative opportunities in the private sector.

But most of the forgiven “not-for-profit” loans will benefit doctors and surgeons. People like Emily Van Kirk and her husband, who managed to rack up $700,000 of debt while attending medical school in St. Maarten. Much of this balance will be forgiven as – like a lot of doctors – the couple plans on working in hospitals. (Uncle Sam must have forgotten that almost 80% of hospitals are “not for profit”… leaving a loophole a mile wide for some of the workforce’s highest wage-earners.)

Many student loans went to honest people who plan on paying back every penny they borrowed.

But some… an awful lot, in fact… had no such plan. Hundreds of billions of dollars in student debt is out there that won’t be or can’t be repaid. And the result is going to be a disaster.

Regards,

Bryan Beach

***

 

If you’re interested in reading more about America’s debt bubble, we recommend the new book, The American Jubilee

Massive amounts of debt have been piled on the weakest in our society. The poor – and especially the young and poor in our country – have no hope of being able to afford the American dream anymore.

When this bubble breaks, it will be an entire generation of young Americans who will suffer.

And it’s not just the size of Americans’ debts that’s the problem… It’s who owes the money that’s the bigger concern. When the rich get in trouble with debt, it’s an economic problem. But when the poor and middle class get in trouble with debt, it’s a political problem.

That’s what makes a national “Debt Jubilee” inevitable. To read more about this problem, click here.

Now on to the latest news…

Far more Americans are having trouble “keeping up” than you realize…

Exclusive: 40% in U.S. can’t afford middle-class basics

At a time of rock-bottom joblessness, high corporate profits, and a booming stock market, more than 40% of U.S. households cannot pay the basics of a middle-class lifestyle.

A fantastic read from American Consequences contributor Matt Labash about writer and reporter Charlie LeDuff in Detroit…

A Little Bit of Real People

“I got love for people,” he says without guile, not a pronouncement you hear generally misanthropic reporters make every day. Charlie saw the Hole getting deeper – more and more falling prey to the effects of corporate greed, government neglect, or personal dissolution.

In the meantime, the New Yorker is reporting on rich folks eating gilded food…

Twenty-Four-Karat Chicken Wings and the Allure of Eating Gold

The whole point of eating Ainsworth’s wings (or the gold-leaf donut that was once sold in Brooklyn, or the maki roll dressed in gilded nori in Tokyo), by contrast, is the languid extravagance of destroying value.Robert Shiller warns on cryptocurrencies with a look back at the rise of “time money” in the 1800s…

The Old Allure of New Money

New ideas for money seem to go with the territory of revolution, accompanied by a compelling, easily understood narrative…Infighting and disorganization inside a left-leaning grassroots group… 

Bernie’s army in disarray

‘Our Revolution’ has shown no ability to tip a major Democratic election in its favor — despite possessing Sanders’ email list, the envy of the Democratic Party — and can claim no major wins in 2018 as its own.

 

Read our latest issues of American Consequences by clicking here.

And let us know what you’re reading at [email protected].

Regards,

Steven Longenecker
With P.J. O’Rourke and the American Consequences Editorial Staff
May 23, 2018

Read more from American Consequences…

Seattle moves from soaking the rich to … soaking everyone else

As our friend Hugh Hewitt wonders, it’s tough to see why anyone does business in Seattle these days. Fresh off its imposition of a “head tax” on its most successful businesses, the city council has now begun an effort to raise the limit on property taxes on both businesses and homes, not long after the state of Washington already hiked their levies. The city wants to expand free preschool programs and offer free community college, but it will be anything but free to property owners and businesses:

People who own a home in King County are paying about 17% more in property taxes this year than last year to help pay for the state’s funding of public education.

But come November, Seattle leaders will be asking voters to approve a bit more of an increase for city dwellers.

City Council members say while the state funding property tax hike pays for basic education, the levy they want to be renewed will be an extra investment to ensure that kids from preschool to high school will have what it takes to succeed.

But don’t call it a tax hike, says one council member. It’s an enhancement!

In 2014, Seattle voters approved a $58 million levy allowing low-income kids to go to preschool for free. …

“So it’s just an enhancement of the property tax that people are currently paying and have been since 2011,” Gonzalez said.

The mayor’s office projects that it will cost Seattle homeowners an extra $5 a week, but that adds up — and it’s not the only tax enhancement they’ve faced over the last few years. Businesses will undoubtedly get hit harder, either on property they own directly or by increased lease costs from landlords. The Amazons of Seattle will likely be able to absorb it by passing costs on to their customers, as will the wealthier residents of the city so enamored of the idea of offering “free” services funded by others.

It’s the middle class that will get hammered with these tax hikes, and they’re already getting pummeled with all the tax hikes that came before it, as one resident explained:

“It’s not just homelessness. It’s the bike lanes and budget overruns, the Bertha tunnel, and the overruns on that, the First Ave streetcar and overruns on that,” Seattle resident Matt Dubin said. Dubin is a local attorney now running to become a state lawmaker this year. He says he is upset over city leaders squeezing out the middle class. “It’s making it impossible for the middle class to live in Seattle. If we keep going down this road nobody will be able to live in Seattle except for the very rich and the homeless,” Dubin said.

And it might not even stop there. The “very rich” have other options too, and they’ll eventually exercise them. That will leave the few middle-class residents and business owners remaining holding the bag. Better to get out now than get stuck with that bill. Or, better yet, elect city council members with a lick of economic sense and operational competency.

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