New Yahoo! Column: Student Loan Repayment

My latest Yahoo! column gives all the info on new laws and resources to help people repay their student loans.

On July 1, Generation Debt got some good news: New rules came into effect making college and graduate school loan repayment much more affordable for a wide range of people.

The idea behind the rules, applauded by student advocates, is to make our higher education system more equitable by helping those who graduate, play by the rules, and meet their obligations to repay the cost of their education.

One question that appeared in the comments: can you get a direct consolidation loan if you already have a lenders' consolidation loan?

According to the fed's web site FAQ section, the answer is YES if you specifically intend to apply for the Public Service Loan Repayment program and can show that you are eligible.

Economic Downturn Means More Jobless Youth

Says the Washington Post:
Young adults seeking low-skill service jobs for the summer must contend with older, laid-off workers, illegal immigrants and college graduates who cannot find work in their fields, as well as with cuts in federal summer jobs programs.
As a result, the national youth jobless rate for June was at its highest in six decades, with 37 percent of teenagers ages 16 to 19 employed, compared with 51 percent in June 2000, according to Northeastern
University's Center for Labor Market Studies, which analyzed Labor Department data.

Six decades! I guess the kids can always join the army,

Latest Yahoo Column: Social Security/Medicare

My latest Yahoo! column grew out of the Youth Entitlement Summit I attended a few weeks ago in DC. These are always sticky issues to talk about and some people think liberals & progressives shouldn't even bring them up, but I don't feel bound by that kind of movement-think. These are the most important and biggest social welfare programs we have, and if we, liberals and progressives, don't have the courage to discuss them, defend them, and fix them, then why bother advocating more social welfare programs such as a universal health care system?

Time Vs. Money

From Freakonomics:
Not surprisingly, we feel more stressed for time than ever before — the opportunity cost of time has risen compared to the opportunity cost of goods. In fact, people with higher incomes usually express more time stress than those with lower incomes.

What Are You Gonna Do With That Fancy $120K Degree?

Young Ivy League grads are having a hell of a time deciding. According to the Times, too many are pulled away by the lure of lucrative finance and consulting gigs, instead of entering public service. I heartily disrespected this choice as a young Ivy league student myself, because it seemed both materialistic and unimaginative. Granted, some classmates who went into i-banking or joined McKinsey had big loans to pay off. But many were unbravely looking for another competitive, elite experience to replicate what they already know, or a paycheck big enough to justify their parents' expenditures and expectations. Sez one student:

“It’s like applying to college all over again,” he added. “ ‘I applied to 8 to 10 Ivy League colleges, and I got in here. I applied to these 40 companies, and I got into these ones.’ It’s exactly the thing that appeals to the Harvard competitive spirit.”

Ironically, joining the finance world is not the same golden ticket that it was five or six years ago, as so many of these banks are imploding and shedding staff. Pity the kid who hates numbers but took a job at Bear Sterns just for the money.

I was aiming to join a different self-dubbed elite: the Devil Wears Prada, New York media set. This is just another brand of self-delusion, of course: "You work for fabulously wealthy people in divisions of multinational corporations, but are told you’ve somehow opted out of the consulting/I-banking rat race, because your filing and faxing and phone-answering is somehow edifying.”

Ultimately, all jobs have their venal aspects. I learned from some great mentors to respect people who work hard, play by the rules, and have the courage and insight to trust and develop their own unique capacities. And if the rules are too crappy -- change them!

Homeownership and the Dream

“'Owning a home lies at the heart of the American dream.'[. . .] Oops."

Paul Krugman's Monday column is a smart look at one piece of the American dream I also questioned in my column last week: homeownership.

"Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?"

Are you less of a citizen, less involved in your community, if you don't hold property?
Is it less savvy financially if you choose to spread your investment risks rather than sink most of your net worth into a single purchase made on margin?
Is the mortgage deduction really fair to those of us who choose to do other things with our money?
And what about the benefit to the planet of living in denser, smaller, more efficient apartments, with less space for stuff, rather than moving out to the suburbs just so you can afford a house?

Taking all this into account, my husband and I do still dream of owning a piece of property at some point--Paul Krugman admits he's a homeowner too.
I think the major advantage to me is the sense of long-term rootedness in a community, especially for raising children. But the fact is that that stability is hard to come by in today's economy, or it least can take a while. My industry, while centered in New York, is completely volatile; my work takes me all over the East Coast and to the West Coast several times a year; my husband's company is less than 10 years old and is headquartered on the West Coast; and my family and friends are pretty well scattered too.

Latest Yahoo Column: American Dream

My latest Yahoo! Column is on the old and new American dream.

PS. A story in Time Magazine relates to the "more time, less stuff" part of my piece: How to Live with Just 100 Things.

Financial Decadence

David Brooks, NYT, on the cultural anthropology/history of debt:

"The most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money."

He's writing about this report, "For a New Thrift: Confronting the Debt Culture"
which is trying to address the explosion of both personal and social debt.

I love the idea of returning to thrift as a great American value and as a matter of social consciousness. With people my own age, I tend to talk about this idea in terms of financial integrity and sustainable spending. We are in an age where it's so crucial to be aware of the limits on resources of all kinds, to think of each other, and to plan for the future.

American Dream "Wounded"

Says the usually sunny USA Today.

"Work hard, play by the rules and tomorrow will be better than today. That implicit promise has been at the core of the American Experience through good times and bad.
But now, whipsawed by plummeting home values, $4-a-gallon gas, rising food prices and gyrating financial markets, Americans increasingly fear that the national bargain has unraveled, that their once-steady march toward affluence has derailed. In a new USA TODAY poll, 54% of those surveyed say their standard of living is no better today than five years ago.
"Fewer Americans now than at any time in the last half-century believe they're moving forward in life," concluded a recent report by the Washington, D.C.-based Pew Research Center.
The USA TODAY respondents were more upbeat about the prospects for improvement in the next five years, but only 45% expect their children to live better than they do.

"I don't think it is going to be as easy for them. They're going to have to pay back a tremendous debt load. … I just don't see the opportunities being there," says Matt Gwynne, 63, a retired executive in Angier, N.C

"My American dream almost came true
But the things they promised me never came through
I believe in the American dream
But things are never quite what they seem"

Latest Yahoo Column: Your Questions

In this week's Yahoo column, I answer questions on student loan repayment, money management and more.

Community Colleges Losing Student Lenders--Good Riddance!

This is perfect. Just in time for the election season, banks like Citibank and JPMorgan Chase
are demonstrating that they're in the student loan business not to help people go to college, but to make a buck. They're dropping community colleges and for-profit colleges from their rolls as the credit markets tighten.

On the one hand, you can't fault banks for acting like businesses, because that's exactly what they are. Loans to low-income students at lower priced colleges tend to be smaller, representing less profit for the same amount of effort to the lender, and they may have higher default rates, especially in the case of for-profit "career colleges".

On the other hand, why in the heck did we put profit-seeking businesses in the middle of the student aid process in the first place? Taxpayers guarantee 97% of these banks' money, and yet at the slightest increase of risk, lenders are leaving needy students in the lurch and forcing them to find new loans. A better alternative exists: the federal direct loan program. By expanding that program, in exchange for increasing that guarantee from 97% to 100%, we would be guaranteeing one, simple, dependable, affordable option for all students who need a loan to go to college.

One community college financial aid person I spoke to today said she was considering switching her school into the direct loan program for all these reasons. I predict more colleges will follow, and that will be a good thing for students. Taxpayers will benefit too, because the direct loan program is cheaper without the trouble of subsidizing businesses that will leave when the going gets rough.

A new GI Bill

New, improved GI Bill passes overwhelmingly in the Senate. This is Senator Jim Webb's initiative, which I wrote about in one of my first Yahoo! Finance columns.
The $51 billion measure pays for four year's tuition at the highest-priced public institution in the veteran's home state. Current benefits have eroded with the growing cost of college.
According to Paul Rieckhoff of the Iraq and Afghanistan Veterans of America:
"These 75 Senators stood with Senators Jim Webb and Chuck Hagel in favor of a new bipartisan GI Bill that actually covers the cost of college. As these Senators return home to honor troops and veterans during the Memorial Day recess, they can proudly point to their vote this week as proof of their commitment to our troops. IAVA thanks each and every one of them."

Yahoo! Finance Advice for New Grads

My latest Yahoo! column gives some advice for new college grads. It's based on some things I've talked about with my sister and her friends.
There's a real challenge in writing for a beginner audience about personal finance. I think Ron Lieber did a great job with his new Your Money column in the New York Times of being simple but not simplistic, and readers seem to agree since it's on the most emailed list.

Here's his Michael Pollan-ized version of investment advice: "Index (mostly). Save a ton. Reallocate infrequently."

Or maybe even simpler: Do Less. Save More.

Next week I'll be answering economic questions from recent grads. I've been getting some great emails lately with all kinds of questions and personal dilemmas and responses.

Also, my most recent Huffington Post blog post sparked an awesome discussion with 46 comments. One of my favorites:

"This generation is going to have a much more difficult time of it. The are coming of age in a period in which America is a declining power. It is good to see that a swing toward a more progressive political stance is the outcome. It is a good thing that they want a new deal. The problem is in the 1980's the shift toward free market economic models meant that few colleges taught anything other than the free market model. There is a whole generation of economists who nothing nothing of Keynsianism. Fashioning a new deal will require some knowledge of economic models that recognize a legitimate role for government to play in the economy. Where are the architects for this new deal going to come from?"

Jon Stewart is our Nice Dad

Jon Stewart, College of William & Mary, May 2004
"I know we were supposed to bequeath to the next generation a world better than the one we were handed. So, sorry.

I don’t know if you’ve been following the news lately, but it just kinda got away from us. Somewhere between the gold rush of easy internet profits and an arrogant sense of endless empire, we heard kind of a pinging noise, and then the damn thing just died on us. So I apologize.

But here’s the good news. You fix this thing, you’re the next greatest generation, people."

"And the last thing I want to address is the idea that somehow this new generation is not as prepared for the sacrifice and the tenacity that will be needed in the difficult times ahead. I have not found this generation to be cynical or apathetic or selfish. They are as strong and as decent as any people that I have met. And I will say this, on my way down here I stopped at Bethesda Naval, and when you talk to the young kids that are there that have just been back from Iraq and Afghanistan, you don't have the worry about the future that you hear from so many that are not a part of this generation but judging it from above."

Millennials: Downtrodden or Just Dumb?

Bob Herbert in the NYT today:

"The landscape is changing before our eyes. Younger voters struggling with the enormous costs of a college education, or trying to raise families in a bleak employment environment, or using their credit cards to cover everyday expenses like food or energy costs are not much interested in hearing that the government to which they pay taxes can do little or nothing to help them."

Studies show that this is the most progressive generation in decades. We want a new New Deal.

On the other hand, maybe a wholesale transformation of government seems too difficult or out of reach. Instead, we can all indulge in a nice round of Blame the Victim.

Some scoldy English prof in the Boston Globe:

"The ignorance is hard to believe ... It isn't enough to say that these young people are uninterested in world realities. They are actively cut off from them."

Would that it were true! Many of the young people I talk to would love to be cut off from realities like the war in Iraq (who do you think is fighting over there, John McCain?), student loan and credit card debt, low-wage jobs, lack of access to health care, & high housing costs.

Unfortunately, it's a pretty common pattern to label an economically disadvantaged, politically disenfranchised group as being dumb. You can see it in racism, sexism, and now ageism.

Where Are We?

"The fact that the government hasn't managed "to clear debris and restore basic services like water and power in what is the country's wealthiest city" is an illustration of how slow the recovery process will be, says the NYT."

Gee, I kind of remember New Orleans residents waiting a little more than five days for basic services and debris clearing after Katrina.

Where Does the Debt Snowball Stop?

From my email inbox:
Anya, I just wanted to say I’m a big fan of your articles on yahoo finance.
You seem to be on the same page that I’ve been on since the 90’s about debt.

I’ve managed to remain debt free with the exception of a mortgage.

I think it’s insane to keep up with debt your whole life.
I wanted to get your opinion…
What is happening to our country with debt? How can this keep up?
Many American consumers riddled with debt and are keeping up with the joneses.
How does it continue to sustain and what happens to us, the people that have kept out of debt?
If, and, or when the bottom drops out and people with debt start to collapse, will they take us with them?

Hi Scott,

These are great questions.
I think that what happened to our country with debt is a complex and fascinating topic that will be discussed by historians for years. Here are some factors:

We went from a manufacturing economy to one based on marketing goods and ideas and moving money around. The financial sector got very large relative to other parts of the economy, and innovative in new ways to lend money. Consumer banking was deregulated state by state, allowing for such things as payday lending and 30% interest rate credit cards. Because of our financial power and because the dollar was until recently the global currency, a lot of other countries were willing to lend us money. Our wealth depends on growth of consumer spending, yet median incomes have barely risen in the last 30 years, so borrowing made up the difference.

Unfortunately, there will be a large cost to society from so many people having gone into more debt than they can afford. This cost can already be seen.

--The economy may go into a prolonged recession because the consumer spending that has been fueling its growth was coming from people spending beyond their means and they are no longer able to do so.
--If the victims of the housing crunch are bailed out, everyone will pay higher taxes as a result. Also, it may take a long time for housing to become affordable again. Prices were bid up by people who got mortgages they could not afford. (On the other hand, if you have good credit there are more opportunities now to buy a home in foreclosure for a good price.)
--The cost of borrowing will go up. There has been a trend of cheaper and cheaper credit, supported by the fees and penalties paid by those who are seduced into borrowing more than they can afford. If people start defaulting on their loans, creditors will raise their interest rates and become more selective about lending.
--One of the effects I'm most worried about: People who have been spending beyond their means have not been saving adequately for retirement. And the government which has been spending beyond its means is not prepared adequately to fund Social Security.

-- After all this is over, America may have to reconstitute its economy in such a way that we are not the consumer market of the world. What will we do if we are not marketing useless stuff made in China to ourselves?

New Yahoo Column: ABCs of IRAs

Only 55 percent of Americans working full-time had a 401K in 2006. And part-time workers, freelancers, independent contractors, and those with lower incomes are the least likely to have a 401(k). That means it's vitally important that workers in their 20s and 30s, who are most likely to fall into all of these categories, understand the basics of the Individual Retirement Account (IRA).

We Can Do It

Hall, 18, and Gillard, 20, are part of a surge in voters under 30 that has changed the composition of the primary electorate and could at last turn young people into political players with clout.

Good story pointing out it's more than the Obama factor, it's a generational shift. Cheers to Neil Howe & Bill Strauss for correctly calling Millennials a "civic" generation.

Amen, Sister

"Look at the rest of the country— we're paralyzed with anxiety about the ensuing economic collapse and environmental chaos. We're so afraid, we smell bad. In the Gulf, in New Orleans, everyone left standing has BEEN there and DONE that. And they've got the Army Corps of Engineers tattoo on their shingle to prove it....

The fact that Southern Louisiana and Mississippi are still standing, partying, fucking, cooking, and making music together, is testimony to a human spirit that survives out of sheer spite— and true love. This is a community of survivors. They're the early adopters of Armageddon. I found it relaxing."

She is so right. I gotta get home soon for some of that.

"A Dozen Governments Will Fall"

Last night I went to the following event (video here):
On Thursday, April 24, the Museum of American Finance (did you know there was one?) will host a panel discussion entitled "Finance, Energy & the Environment: Changing Markets &
Opportunities to explore the sources of power that will be keeping the lights on and filling investors' pockets in the next five years."

Speakers included:
Pete Cartwright, CEO of Advanced Power Projects, Inc.
Daniel Abbasi, Director at Mission-Point Capital Partners,
Michael Molnar, Vice President at Goldman, Sachs & Co. responsible for the
Alternative Energy and Coal sectors in the Energy & Materials Equity Business
Unit, and Carl Pope, executive director of the Sierra Club.

I always find these discussions somewhat surreal because of the wild contrast between recognizing the gravity of the planetary threat of climate change, and business-as-usual discussions about IPOs and whether people will accept higher utility rates. Are we saving the planet here, or are we just rosining our bows and shining up our fiddles?

Also clear was that solutions were abundant, even if the will to implement them isn't immediately in evidence. In presidential politics, the panelists pointed out, global warming is way down the list.

There's such a frustrating gap between what's available and possible and what we are actually acting on. Countless energy alternatives were mentioned, including carbon sequestration, new co-generation and combined-cycle power plants (wind +gas, solar+coal), pricing efficiency, nuclear. Also discussed were the intricacies of a potential carbon market in the US. There was a lot of healthy disagreement between the enviro guy and the three investor guys that didn't always line up in a predictable way.

Abbasio mentioned the famous Stern report that concluded that the real cost of addressing emissions amounted to 1% of GDP, while the real cost of NOT addressing emissions and allowing global warming to proceed ranges from 5 to 20% of GDP over the next few decades. This is the cost in the existing market, without any fancy pricing of externalities like clean air or drinkable water or health care.

Pope spoke movingly of the Sierra Club's transition from a conservation-focused group to a more activist one, working not only "to stop bad things" but "to make good things happen faster." (Apparently a price on carbon is one of those good things). He also made a prediction that made me sit up. He said between now and November when the next president is elected,

"One dozen governments around the world will fall because of the food crisis, including some that are very important to American security."

Yikes.
Don't know where he got it from, but you heard it here first.

Saving for your Future

My new Yahoo column is a simple 401(k) primer.
Or as Don M says in a 2 star review: "More Advice from the Socialist.....great"

The Green Planet (Without All These %$#@! People)

Excellent essay (by my college classmate Rebecca Onion) on the limits and dangers of eco-topian post-apocalyptic dreaming by the likes of James Howard Kunstler (whose Clusterfuck Nation wins Best Blog Title, but whose new novel sounds like a sexist mess.)

"In the perfect green apocalypse, population reduction leaves a world in which everybody wins—birds, bees, and people."

Elitist dreams of how great things would be if all the Hummer drivers went away? I'm guilty, as are many of my neighbors in Williamsburg, Brooklyn. Not particularly helpful.

At the same time, I've talked to people who came close to this experience, in the brief hours of the New York City blackout in 2003, and more so in the weeks-long aftermath of Hurricane Katrina, and did indeed discover unexpected inner strength, the value of hard work to meet basic survival needs, and a sense of community and freedom they'd never known. I don't think it's a bad thing to imagine an America that might be different, in a good way, after everything that's unsustainable in our current system--corporate, consumerist, polluting, unequal--has in fact collapsed.
That's what unsustainable means, after all. If it can't go on, it won't go on. And what then?

FC Blog: The Upside of No Cheap Chinese

Crossposted from my Fast Company blog:

Recently, articles in both the New York Times and Slate have warned that American stores may no longer be so awash in supercheap Asian imports. Not only is the dollar weakening, but inflation and economic growth in countries like China and Vietnam are inexorably raising the costs of doing business. And there are few obvious backup countries ready to step into the wings as cheap manufacturing powerhouses.

We're dealing with complex global economic factors here, but I wanted to point out the potentially positive side to this shift from both human rights and environmental perspectives. The first is stated directly in Alexandra Harney's article:

"China is rolling out wage increases around the country and tightening its labor laws. Wages are rising at double-digit rates in coastal China...China's Generation Y, the children born after the one-child policy came into effect, are increasingly aware of their rights to a legal wage, health insurance, and a certain number of days off every month."

Now, I shop at Forever 21, H&M and Tar-zhay just like everyone else. But it's a pretty heartless person who would grudge their tanktops going up from $5 to $12, if the tradeoff was better working conditions for the poor in developing countries.

The possible environmental benefits here are more conjectural. Critics of globalization have devoted much scholarly ink to the outsized environmental costs of export-oriented agriculture and manufacture. Increasing volumes of raw materials and finished products are crossing the globe, with bigger and bigger CO2 trails following them in the form of airplane, ship, train, and truck fuel, not to mention the environmental impact of all those highways, roads, ports, canals, locks, bridges, and airports (see this story about the new China-financed Asian superhighway linking Cambodia, China, Laos, Myanmar, Thailand, and Vietnam.)

Global trade made economic sense despite the distance because of extremely cheap labor and extremely cheap fuel. Now that the costs are rising, just maybe, the advantages of re-localized, sustainable supply chains have a chance to come to the fore.

New Yahoo Column: Student Loan Credit Crunch

In the past month, the media has been jam-packed with stories about a supposed student loan credit crunch. It's true that, as a result of the general turmoil in the credit market, some lenders have decided to stop offering both federal and private, unsubsidized student loans. The requirements have also been tightened for those borrowing private loans.

But the experts I've talked to say there's no crisis. In fact, there may be a silver lining to the credit upheaval: a saner market that steers more students and families toward safer, cheaper, smaller, federally guaranteed loans.

Update: Congress has moved fast to ensure continued loan access--there's supposed to be a vote today in the House on the “Ensuring Continued Access to Student Loans Act of 2008.” According to the USSA and the PIRGs, it's a mixed bag. They like the enhancements to PLUS and Direct Loans, but not the sops to the lenders. Big picture:
"Every year, nearly 400,000 academically qualified high school graduates do not pursue a four-year education. For many of those students, cost—or fear of cost—is the main deterrent. We know some of these students, particularly those from low-income families, may be debt-averse, unwilling to take on even reasonable levels of student borrowing. In light of the real challenge we face persuading students to responsibly invest in their education, we believe any discussion of a potential credit crisis should conducted with great circumspection and care. We believe that the student loan industry and its surrogates have sought to play up the risk of a crisis in the media in hopes of reversing the cuts to their excess subsidies enacted by you just last year. While those familiar with the industry recognize the perennial game of chicken it has played with Congress over subsidies, these interest groups are sending an insidious and dangerous message to students and families around the country about access to college. "

It's A New Paradigm!!!

Thanks, Tom Tomorrow.

The Pricier Sandwich

Yesterday we drove upstate to go rock climbing and stopped in the usual awesome little bakery in New Paltz to get our sandwiches. A little sign on the counter warned their customers that the price of flour, which was $8 a bag just a couple of years ago, had gone up to $30 a bag, and other foods were also more expensive. They said they were doing their best not to pass along too much of the increased cost and asked customers to understand. Since folks were lined up out the door, it didn't seem like too much of a problem yet (and my sandwich was still just $6.50). But it served as a scary reminder of the way the world is interconnected.
Krugman on rising world food prices today: Over the past few years the prices of wheat, corn, rice and other basic foodstuffs have doubled or tripled, with much of the increase taking place just in the last few months. High food prices dismay even relatively well-off Americans — but they’re truly devastating in poor countries, where food often accounts for more than half a family’s spending. There have already been food riots around the world.

Food. Riots.
Combined with yesterday's story about the revival of survivalism--in the frothy Styles section, no less--it's definitely a wake up call. Here's what I'm going to do, whether practical, ritualistic, or symbolic. -Write an essay. -Plant a better container garden this spring on our balcony in Brooklyn. -Fix my bike. -take fewer cabs. -Donate to Oxfam. -Buy 20 pound bags of rice and beans, batteries and a hand-crank radio. -Pray.
What about you?

The Colbert Report, Report

My esteemed coworker David Lidsky was the only one to spot this bit on the Colbert Report last night.

New Yahoo Column is up

It's on Generation Debt's political agenda.

Hold the Hysteria?

As Robert Samuelson of Newsweek points out,
"The "real economy" of spending, production and jobs -- though weakening -- is hardly in a state of collapse."

The currently scary possibilities and uncertainties are in the "shadow economy" of credit, securities, and markets. Since most of our financial media coverage is obsessed with Wall Street, not Main Street, we're hearing a lot more about these new financial instruments which nobody really understands, and less about the bread and butter. Hence this talk about the Great Depression, which is an economic equivalent of Godwin's law--dragging Nazis into a political conversation. An extremist analogy that grinds intelligent thinking to a halt.

But I think there's another level of factors we should be paying attention to, that does have to do with the "real economy," that is pretty scary. I'm talking about the two-decade, unsustainable trend of stagnant household earnings and increasing household debt. Consumer spending can't recover unless wages go up and people are able to pay down debt. But wages tend to go down in economic climates like this one. And borrowing more to get out of this mess
is just plain unsustainable.

What I Said on "Larry King Live"

Ever since Generation Debt came out in 2006 I have been very lucky to be able to occasionally comment on TV and radio on generational and economic issues--three or four times a month, these days. I respect what broadcasters do. Broadcast communication requires special skills of confidence, improvisation, and wit--it's a tough job.

Yet it has to be said that TV is generally a low-information medium. There's nothing like it when there's true breaking news--election results are coming in or there's a big natural disaster. But if you watch for an hour on a slow news day you might learn that a bus crashed somewhere in Venezuela, and that bacon is bad for you. I haven't owned a television for three years, and I get most of my information from print, sometimes radio. So I'm ambivalent about appearing on TV, and I hardly ever watch my clips, as the pros do. I hate the feeling that I'm essentially a spokesmodel for the various businesses with which I'm professionally associated.

I was the youngest guest that night by about 10 years. Somebody in the green room asked me if I was Arianna Huffington's assistant (she was there to talk about politics).

Our brief was simply to talk about stocks vs. real estate. But as readers of my blog and book know, I'm extremely worried about what's going on with the economy. I think the recession may be very grave and destabilizing. Americans have to change their behavior, especially around debt. But average Americans have been spending beyond their means simply to afford middle-class basics like housing, health care, and education. If they can't borrow any more, our quality of life is truly going to suffer.

Meanwhile, rising energy costs and climate change demand that the energy industry, which is the largest single concentration of capital in our economy, must move away from the importation of fossil fuels. This is going to cause huge economic upheaval all by itself.

One important part of the solution is democratic government action. We, the people, must rewrite the rules of the market, to limit environmental degradation, the unregulated speculation that has brought our financial system to the brink of ruin, and the concentration of wealth. The market and the corporation are not people--they are not born free. They are instruments that serve at the pleasure of the people, by the rules we set, for the benefit of everyone.
We also need to strengthen the social safety net and transform our infrastructure. Historically, these are tasks that only government can accomplish, whether on the local or national levels.

I didn't get to say all of this on TV, of course. But the wonderfully kind Wolf Blitzer did give me an opening to say a piece of it.
After devoting most of the segment to the three other panelists, he tossed me the last question. "Are you optimistic, Anya?"
I took a deep breath. "I think I'm going to optimistic when I vote in November, that there's going to be a different set of policies out there that change what happens to the economy for ordinary people.

BLITZER: You think whoever's elected can make a difference?

KAMENETZ: I think we're at the end of market fundamentalism and that we're in the beginning of people who believe in government solutions to some of these problems.

BLITZER: You don't trust the private sector, the markets?

KAMENETZ: Did you see the news today?

BLITZER: You obviously don't.

KAMENETZ: I think that there's a much larger role that the federal government can take on behalf of ordinary people's incomes.

Thanks, Wolf! I had a great time. I hope you didn't regret it.

American Debt

What BusinessWeek is calling "The World's Scariest Chart."

"This chart shows something surprising…an enormous acceleration of borrowing starting in 2000, which didn’t let up until very recently. The solid line is the actual ratio, and the dotted line is where debt would have been if people had kept borrowing at roughly the same as in the 1990s. The difference between the two…roughly 25% of GDP in 2007…is the amount of extra debt.

So by this calculation, there is $3 trillion of extra debt that are weighing down households. That’s why the financial crisis has prove so hard to solve. The real scope of the problem is not subprime mortgages, but rather this $3 trillion extra debt."

Mortgages, home equity loans, credit card debt, student loans, payday loans, auto loans...Household debt is the problem here.

The Shadow Economy and the Real Economy

It's important to make distinctions between the troubles in the markets and the equally bad troubles in the real world.
Shadow problems: precarious, overcomplicated and interconnected investments like mortgage-backed securities; globalization of markets increases volatility.
The problems that directly affect both: overconfidence in housing prices, overreliance on credit.
Real-people problems: stagnant wage growth, increasing instability in job market, lack of health benefits, rising cost of education, deteriorating infrastructure, environmental and resource degradation, inflation in energy and food costs.
From How the World Works:
" The exotic troubles experienced by Wall Street's investment banks right now are a direct consequence of the housing bust and the subprime collapse and all the funny-money machinations with complex financial instruments that have now definitively been proven to be fool's gold. How that distress intersects with high oil prices, high food prices, increasing stress in labor markets and other economic ailments much more familiar to the working man and woman is a narrative whose plot is just beginning to thicken."

One aspect of the narrative is that unfortunately, rich people's problems tend to get more attention, because, as Krugman puts it, "When push comes to shove, financial officials — rightly — aren’t willing to run the risk that losses on bad loans will cripple the financial system and take the real economy down with it."

Krugman again (last week):
I used to think that the major issues facing the next president would be how to get out of Iraq and what to do about health care. At this point, however, I suspect that the biggest problem for the next administration will be figuring out which parts of the financial system to bail out, how to pay the cleanup bills and how to explain what it’s doing to an angry public.

Larry King Live

"Barring breaking news," catch me tomorrow night on "Larry King Live," with Wolf Blitzer as host, talking about the economy and what ordinary people should do. (Work. Save. Vote. Pray.)

Tax Tips for Younger Filers

Latest Yahoo! Column is for everyone who needs a little help getting started on their taxes. Sigh.

Jeffrey Sachs Defines the Problem

Sachs, the End of Poverty / Earth Institute guy, has a new book out on the future of the planet. According to the Slate book club (in which the writer addresses Sachs directly):

"In making the argument for urgent action, you point to the six trends that are shaping this century: economic convergence, or the rapid growth of developing countries; rapid population growth, despite broadly shared declines in fertility, with the poorest countries set to experience the most rapid increases; the rise of Asia; urbanization; a looming environmental disaster, as humanity appropriates for its use an ever-rising share of global resources; and the tumbling of at least 1 billion people into a "self-reinforcing poverty trap."

"In particular, you stress the need to secure four high-priority global goals: first, "sustainable systems of energy, land and resources use that avert the most dangerous trends of climate change, species extinction, and destruction of ecosystems"; second, "stabilization of the world's population at eight billion or below by 2050 through a voluntary reduction of fertility rates"; third, "the end of extreme poverty by 2025 and improved economic security within the rich countries as well"; and, finally, "a new approach to global problem solving based on co-operation among nations and the dynamism and creativity of the nongovernmental sector."

Agree, mostly. I disagree that extreme poverty defines this century as opposed to every other century in human history. I don't think the future of the planet depends on the eradication of poverty or world peace, not the same way as it depends on sustainability. If it does, I don't think we're going to get there before the Messiah.

Darkness before the Dawn

A great storyteller comments on politics:

"Not that I'm announcing my support for anybody, but I'm impressed that Obama got this close to being a nominee just being part African-American. There's a part of me that looks at that and says, "Damn, we're getting healthier on some things." Now, is Obama any more able to address the fact that we're a money-obsessed oligarchy and not a democracy? I don't think so.

I think for change to happen on a level that actually affects the structure of that oligarchy, a lot of distressing things will have to happen, and more people are going to have to suffer a great deal more. More struggle for the working class, and the middle-class is going to have to be marginalized. Wages will have to go a lot lower, the recession will have to go a lot deeper -- and I think we're in a recession and headed for some bad economic times. I think it's going to have to go a lot deeper."

Who's the Candidate of Big Oil?

Which Democratic candidate will provide most aid and succor to our failed fossil fuel economy?

Both Hillary and Obama support cap-and-trade with auctions, says Brendan Koerner of Slate, and the essential environmental mantra "80 by 50" (80% reductions of CO2 below 1990 levels by 2050), at least in theory. "Clinton's plan is a little better on nitty-gritty details," he writes, such as "Connie Mae," a new federal agency to build green homes.

On the other hand, says How The World Works, when it comes to Big Oil campaign contributions, "Of candidates still left in the race, Hillary Clinton ($267,150) edges out John McCain ($229,685) for first place. Barack Obama is third, having only raised $128,290. Ron Paul raised $84,438; Mike Huckabee, a paltry $51,600."

Lying Memoirist Portrayed Gang Member We Can Love

I don't write a lot of literary criticism on this blog, but I do come from distinguished literary stock, and this is more social criticism anyway.

Last week, I read with interest this glowing New York Times profile of Margaret B.Jones, a single mom who has just published a memoir about growing up a foster child in tough, gangland South Central. The piece hinged on the contrast between Jones' current tranquil, extended-family-of-friends life in a nice four-bedroom house in sleepy Eugene, OR, and her traumatic background of violence and death in LA, which she portrayed in the book with an unusual vividness and compassion that the writer hinted was essentially feminine.

"Unlike several other recent gang memoirs, all written by men, Ms. Jones’s story is told from a nurturer’s point of view. Along with grit and blood, every chapter describes tenderness and love between people as well as the rites and details of domestic life."

Well the story wasn't just nice and readable because it was by a chick. It was readable because it was TOTALLY FALSE, and it was accessible because it was written by a white person who went to private school, grew up with both parents, and knows these stories only through her friends that she met at Starbucks.

Hmm. I used to hang out in independent coffee shops in high school (before New Orleans had Starbucks). I was friendly with a lot of colorful characters, like a gutter punk named Nacho and a bunch of semi-itinerant musicians and drunks of various backgrounds. Does that mean that I understand the shit that they went through every day? Absolutely not.

As a journalist who has wrestled with--and been criticized for--issues of representation and identity in my own work, (can I really claim to speak for the most burdened members of Generation Debt, etc) I feel like it's the duty of all conscientious writers to call out not only this troubled woman, but the entire publishing industry, for an act of brazen cultural appropriation. This woman outright stole the identities of poor people of color and packaged them into an attractive story that the New York Times swallowed hook, line, and sinker.

Related: Undercover Black Man: Fucking liar

Record Prices for Oil and Food

1) Oil prices pass inflation-adjusted record
while
2) "The world's food situation is bleak...The world has faced periodic bouts when it looked as if population growth would outstrip the food supply. Each time, food production has grown to meet demand. This time it might not be so easy.... mass starvation."

A rather unsettling phrase to read over your morning coffee: mass starvation. We have to stop subsidizing intensive crop biofuels, cut back on meat consumption, and seriously consider broad-based individual permaculture, aka edible landscapes. And it still might not be enough to feed everyone, because the Green Revolution of the 1960s depended on petroleum-fueled farm implements and petroleum-based fertilizers; see 1). (I've heard various reports on organic productivity; I know that animal-powered farms exist, but no one makes extreme claims about their yields per acre. Fuel cell tractors, anyone?)

This is the third time in the last few weeks when I've been startled not by the facts I'm hearing, but by the relatively mainstream source. (The other times: hearing the heads of large energy and chemical corporations at last week's Carbon Forum admit how screwed the environment is, even as they outline how they'll fight for the right to continue to bleed the world dry; and this article on how America may be on the brink of revolution.)

An Economic Compact for the Young

Required reading for those interested in generational economics and politics.

"For a quarter-century, policies that once promoted entry into the middle class, such as affordable college tuition and support for first-time homeownership, have been battered by ideological and fiscal assault. Social investment has not kept up with changing social realities, and the remnant of America's welfare state is tilted toward the other end of the age spectrum. The solution is not, as some have suggested, to remove supports from the elderly. Reliable pensions and Medicare are also on the defensive. The remedy is to enlarge social investment for the young, to expand economic pathways to secure adulthood. With the exception of the generation born between roughly 1880 and 1910, whose members lost so much as adults in the Great Depression, there has never been an extended period of generational downward mobility comparable to this one -- and it is all the more remarkable for occurring during a period of general economic growth. "

NPR tomorrow

I'll be on the Bryant Park Project at 7 am tomorrow talking about recent economic news and how you as an individual should -p-a-n-i-c- react.

Today's Column: Investing Basics

To my mind, the most important point in today's Yahoo! column is the distinction between saving, retirement planning, and speculating.
I just don't think it's a good idea to chase double digit returns with the money you need to retire on. There are plenty of safer investments out there.

If I can speak personally for a second, I think of money as a major responsibility. I want to consume and invest my resources in a way that's going to maximize happiness for myself, my family, my community, and the planet. That's a lot of work and I screw it up in big and small ways every day. And making money decisions is only one part of life--you need to leave time for actual work, fun, friends, family, exercise, education, spiritual life, etc.

Or in the words of the Notorious B.I.G: Mo' money, mo' problems.

The Culture of No Roots

Brooke Berman, a 38-year-old New York City playwright, has a new play up, "Hunting and Gathering," based on the tenuous existence of city artists like herself. She has lived in 30 apartments in the past 20 years.

"Living on money from the odd grant, temp jobs and teaching positions, she is emblematic of her Gypsy tribe — theater people are the original urban nomads — and a vivid example of the increasingly precarious domestic life of an artist trying to live in New York.

Rent for a studio or a one-bedroom in the East Village, for example, has more than doubled in 10 years, said Douglas Hochlerin, a broker with Bond New York, a firm specializing in Manhattan rentals. Last year, when the rent on Ms. Berman’s Mott Street one-bedroom, where she had lived for three years, rose to $1,550 from $1,350, she gave up her lease, beginning another bout of itinerancy, as she described it.

“It’s all about money,” Ms. Berman said cheerfully. “It’s not like I have a penchant for the transient life.”

According to Emily Morse, the director of artistic development at New Dramatists, “two major things have changed as far as this city is concerned: the real estate market and the fact that very little money is going directly to artists.”

She continued: “You used to be able to work a 20-hour week, pay the rent on your tiny studio, and still write your plays. That’s no longer possible.”

Starve your artists and you get starving art.

PS from Paul Krugman on Poverty

Poverty is Poison:

Mainly, however, excuses for poverty involve the assertion that the United States is a land of opportunity, a place where people can start out poor, work hard and become rich.

But the fact of the matter is that Horatio Alger stories are rare, and stories of people trapped by their parents’ poverty are all too common. According to one recent estimate, American children born to parents in the bottom fourth of the income distribution have almost a 50 percent chance of staying there — and almost a two-thirds chance of remaining stuck if they’re black.

"American Dream"? Failed Journalistic experiment?

A guy decides to start his life over with nothing. After ten months he has moved from a homeless shelter into an apartment, bought a pickup truck, and had saved close to $5,000. Not surprisingly, he then wrote a book about his experiences which he holds up as "a testament to what ordinary Americans can achieve."

I find this a cute stunt but a reactionary premise. The credulous CS Monitor article states "He had a gym bag, $25, and little else." Here's something else: he was young, in excellent health, a native English speaker, male, white, good-looking, with a college education, good communication skills, no obvious psychological problems, no addictions, no criminal record, no family problems or obligations. In fact, he quits his little experiment when he learns of a family member's illness. Well guess what? Lots of the ordinary Americans struggling to get out of poverty have sick family members, too.

Adam Shepard, if you really want to show just how easy it is to get out of poverty with a little gumption, I suggest immigrating to a country where you don't speak the language. Then maybe the playing field would be a little more level.

WSJ: Obama is a Downer

Daniel Henninger says Obama's underlying message--speaking to people working for low wages, who can't afford health care and have lost their pensions while lobbyists and corporations roll in dough--is too "depressing" to win the election.

"Sen. Obama is selling ... deep grievance over the structure of American society... selling the revolution -- change "from the bottom up."

This is the best argument for Obama I've yet heard. I have felt inherently distrustful of his charms and his rhetoric, but I think Henninger underestimates how many people feel that same grievance.

Clock is Ticking for American Spending

A couple signs the consumer craziness days are numbered, the thin edge of the wedge:

1) the Wall Street Journal finds a) a rise in credit card delinquencies but b) an "abrupt slowdown" in new borrowing. People are getting in over their heads and they are saying "enough"--banks are tightening borrowing standards to stop the overdrawn from getting new credit.

2)Robert Reich's excellent editorial in the Times. "three decades during which American consumers have spent beyond their means" are "now coming to an end. Consumers have run out of ways to keep the spending binge going."

His solution: raise the income of the "bottom" two thirds of Americans, which has been flat for a staggering 35 years, during which the plums of economic growth have gone to the top 5 percent. Do this through redistributive taxes/income credits, more unions, better schools. He calls this "The only lasting remedy, other than for Americans to accept a lower standard of living and for businesses to adjust to a smaller economy."

As Yahoo commenters often point out, I am a big old commie and therefore predictably in favor of more unions, more redistributive taxes, and better public schools. But I think the latter option is not so unthinkable. A "lower" standard of living, meaning one where enough is enough, one not based on constantly increasing consumption and hours of work,
is exactly what this planet needs. A "smaller" economy, in terms of energy and material inputs, is absolutely necessary for our species' survival.

Latest Yahoo Column: Upside of Downturn

My latest Yahoo! column presents some of the reasons that people our age may actually do well as a result of this downturn. First and foremost, I hope that more people will start to get real about consumption.

Bummer, Private Loans Bankruptcy Discharge Didn't Pass

Sorry for the blizzard of posts this week. Statement from the PIRGs:

“The College Opportunity and Affordability Act contains a meaningful nucleus for private student loan reform. However, given the lessons of the subprime mortgage crisis we must provide basic protections for student loan borrowers in bankruptcy. We are disappointed that the House chose to stand with big banks instead of students who fall victim to predatory private student loans.”

Even More from the Youth Rights Movement

Your Op-Ed piece in the NY Times yesterday (You're 16, etc) was wonderful! We appreciate and are excited by your giving voice to the importance of enfranchisement for youth. Here at Future Voters of America we have been working toward youth empowerment for the last 11 yrs and more recently have focused primarily on enfranchising 16 yr olds with a Vote. This has been through an Introductory Bill to the New York City Council to Lower the Voting Age to 16 in Local and Municipal elections and to changing existing State Public Service laws to permit 16 yr olds to sit on each of the 59 Community Boards in NYC, Youth Board membership and Educational Committee positions...all with voting privileges.

We hope that this idea would get some tread throughout the country if New York City could take the lead. Recently Austria has lowered the vote nationally to 16 and there are movements in France and England as well.

To the Editor:

Re "You're 16, You're Beautiful and You're a Voter" (Op-Ed Feb 6)

Enfranchising youth at 16 through the vote is a civic mission important to accomplish now. All research shows that in order to build an active citizen it is necessary to begin during the high school years when young people are attached to their schools, living at home with their parents and still residing in their communities. I agree with Anya Kamenetz on how important it is to tie the 16 year old vote to civic education. Arguments against lowering the voting age would be substantially lessened with civics training and we would grow a more conscious electorate and strengthen our democratic process.

In New York City there is a current intro bill in the City Council to lower the vote to 16 in local and municipal elections. There are also efforts being made to allow 16 year olds to have a vote on Community boards, Youth Boards and Educational Committees. This election does show clearly that young people want to be in the process but need the right vehicles to bring them on the scene. Enfranchisement of 16 year olds is the last "civil rights movement" in America.
Francine Baras
Diane Graszik
New York, NY Feb.6, 2008

Ms. Baras is executive director of Future Voters of America
Ms. Graszik is an associate executive director of Future Voters of America

Response from the Silver Haired Tsunami

Not my phrase by the way, I think it came from USA Today...

My dad wrote:
I mean the only thing I didn't like about the piece was the reflex knock against old people. There's no evidence really that their judgment is worse than anyone else's necessarily and I think on principle it's as bigoted to slam people just because they are old as it would be to slam them for belonging to any particular group.
The prejudice in our society against the elderly is very ahistorical and weird in human history.

I replied:
That's not a reflex knock. It's a fact. As the population gets older there are going to be more night blind drivers on the road. More lonely isolated people who fall victim to financial [and other] scammers.
I am advocating NOT treating people differently just because they reach a certain age, but looking at people as individuals for what they are able to to do. Testing is a crude way to do this, but one way to introduce the concept that it's level of ability, not calendar year, that matters.

How do we protect people while preserving their independence? Security vs. freedom--the classic democratic conundrum.

More on Youth Rights

From Michael Males, stalwart defender of American adolescents, a much-respected scholar in the area of youth rights (Check out his NYTimes Op-Ed and his book "Kids and Guns"):

Let me suggest one matter--graduated driver licensing may not be a good example of the kind of merit-based or skill-based system for awarding teenagers greater rights. GDL laws incorporate lengthy, arbitrary age-based delays and restrictions, not skill-based tests of driving ability. The result (see attached) of our study published in the Journal of Safety Research is that the "lives saved" among 16-17 year-olds result simply from deterring younger teens from driving, not from making them better drivers, with the troubling result that they then learn to drive at 18 or 19 and suffer increased fatalities. Current GDLs award driving privileges based largely on waiting for a considerable time and attaining a certain age, not on demonstrated skills.

In contrast, a skill-based GDL, which I support (and I think would be consistent with the theme of your op-ed) would dispense with arbitrary age limits and delays (except perhaps to require a minimum age to enter the process, say, 15 or 16) and would instead award driving rights to novice drivers of all ages who demonstrated by rigorous testing an acceptable level of on-the-road driving competence and traffic-law knowledge. In other words, those procedures which inculcate skills and competence should be used to grant rights and licenses, not procedures which simply grant rights based on reaching a certain age.

House Legislation to Reform Student Loans, FAFSA

Via the PIRGs:
"Today the House of Representatives will vote on the College Opportunity and Affordability Act. The legislation contains several important policy changes to reform private student loan policy, critical grant programs and lower the cost of textbooks. In addition the House will vote on an amendment to provide private student loan borrowers with basic bankruptcy protections."


On private student loans, they're addressing the problem that students and parents don't understand that these loans have higher interest rates and less borrower-friendly policies than federal education loans.
--Lenders must inform students "clearly and repeatedly" that private student loans are more expensive than federal student loans, and that all federal eligibility should be exhausted before taking out the private loans.
--Ban "co-branding" of private student loans (where a college cooperates or shares revenues with a private lender, or a private lender uses the "name, emblem, mascot, or logo" of the college.)
--Require schools to certify all private loans to avoid over-reliance on these loans. School oversight was very successful in reducing reliance on private loans at Barnard and other schools.

Just as important, if not more so, is bankruptcy protection for private loans after five years in repayment.
"Representative Danny Davis’s amendment ends an unfair policy of special bankruptcy treatment for lenders who saddle students and their families with high-risk, high-cost private student loans. Over the past decade private, non-federal student lending has grown significantly. These loans are more expensive, have more stringent repayment requirements, and provide fewer protections than federal loans. Moreover, private student loans exacerbate student indebtedness because they provide the worst rates and terms to those students with the greatest financial need. This result directly contradicts the public policies underlying the federal student aid system, which attempts to place a college education within reach of low and middle-income students. The Davis amendment would allow borrowers to discharge their loans in bankruptcy after five years in repayment."

Generation Dead

I started this blog in the summer of 2005 as I was finishing the manuscript for Generation Debt, my first book. It was a promotional tool and a way to keep up with the news, but more interesting was when it served as a live, open notebook for ideas I was interested in exploring elsewhere.
The book's been out in paperback for a year now. I'm still writing a biweekly Generation Debt column for Yahoo! Finance, and I still travel and speak about 12 times a year-- mostly on campuses, on topics like credit cards, student loans, generational politics, personal finance, the changing job market, health care and higher education policy. But I've always had other interests, and I'm feeling a little stifled by the scope of this blog.

I feel a need to start writing and speaking more openly about the issues I really care about. I was just hired by a bunch of really smart people to write about social entrepreneurship, sustainability, technology, culture, and design in the context of business and our changing economy, and I am psyched. I want this blog to serve as a notebook and a reminder of the bigger picture beyond the day-to-day stories.

Andrew Leonard, one of my favorite bloggers, put it well in a post today: "The economic, social and political model of the U.S. has developed serious albeit remediable flaws and needs major surgery." True, and arguably true of civilization as a whole.

G-d willing, most of my life will take place in the 21st century. I am so fascinated by how much has to change in my lifetime. We have to adopt a new energy economy with hopefully a new set of social relations to go with it. We have to mitigate and adapt to the environmental degradation and climate change that is already occurring. We have to adapt to a country that will be older and grayer. And as Americans we have to abandon this dead-ender militarism and accept our place once and for all as a member of the international community, not the sole superpower. But when we look to the new, rising global powers --- India, China, Brazil, (some say Russia)--every single one of them has horrific poverty, terrible infrastructure, even worse environmental problems, and rickety, or non existent, civic institutions.
It's scary. It's easy to get into crisis mode and shut down all thinking. But as I realized after Hurricane Katrina, pessimism is a luxury. As Nachman of Breslav said,
All the world is a very narrow bridge. The most important part is not to be afraid.

More from the Youth Rights Movement

From Alex Koroknay-Palicz :
I heartily agree. I just want to make contact and introduce myself/my group. I run the National Youth Rights Association, a largely youth-led group that campaigns for lowering the voting age, lowering the drinking age and many other adult rights that are currently denied to young people. We're small but growing. We've had some great press coverage and a few good local campaigns.

The recommendations you made in your piece sound a lot like Robert Epstein's. Have you read his book, The Case Against Adolescence? NYRA is big fans of both Epstein and Mike Males (who you might also know). I, and our members, are all very glad to have your support.

Thanks again for writing that great op-ed. Check out the NYRA page here: http://www.youthrights.org

Alex Koroknay-Palicz
Executive Director
National Youth Rights Association

The Case Against Adolescence

From my email inbox:

Dear Ms. Kamenetz - I've received 3 emails so far this morning about your op-ed piece in the Times, saying, more or less, "It sounds like she's rehashing your new book." This is indeed frustrating, given that this book involved more than nine years of research on my part. As you can easily determine online, I'm also working on a book called The Ageless Society, arguing for competency-based assessment across the lifespan. Please see:

http://TheCaseAgainstAdolescence.com
http://HowAdultAreYou.com
http://en.wikipedia.org/wiki/Robert_Epstein

Sincerely, /re
Robert Epstein, Ph.D.
Contributing Editor, Scientific American Mind
Visiting Scholar, University of California San Diego
Host, Psyched!® on Sirius Satellite Radio (LIME, Channel 114)
Director Emeritus, Cambridge Center for Behavioral Studies

http://TheCaseAgainstAdolescence.com
http://TheEpsteinBlog.com
http://DrEpstein.com

What Can Young People Do?

I have an op-ed in the New York Times today.

We should hasten the enfranchisement of this generation, born between 1980 and 1995, by lowering the voting age to 16.

Age thresholds are meant to bring an impartial data point to bear on insoluble moral questions: who can be legally executed, who can die in Iraq, who can operate the meat cutter at the local sub shop. But in a time when both youth and age are being extended, these dividing lines are increasingly inadequate.

Legal age requirements should never stand alone. They should be flexible and pragmatic and paired with educational and cognitive requirements for the exercise of legal maturity.

Driving laws provide the best model for combining early beginnings and mandatory education. Many states have had success with a gradual phasing in of driving rights over a year or more, starting with a learner’s permit at age 16. The most restrictive of these programs are associated with a 38 percent reduction in fatal crashes among the youngest drivers, according to a study conducted by the AAA Foundation for Traffic Safety.

Similarly, 16-year-olds who want to start voting should be able to obtain an “early voting permit” from their high schools upon passing a simple civics course similar to the citizenship test. Besides increasing voter registration, this system would reinforce the notion of voting as a privilege and duty as well as a right — without imposing any across-the-board literacy tests for those over 18.

And why stop at voting? Sixteen is a good starting point for phasing in adult rights and responsibilities, from voting to drinking to marriage. In reality, this is already when most people have their first jobs, their first drinks and their sexual initiations. The law ought to empower young people to negotiate these transitions openly, not furtively.

We know driving laws reflect reality; whoever heard of the scourge of under-age driving? On the other hand, studies have shown that three-fourths of high school seniors have drunk alcohol. Surveys show that teenagers who drink at home with their families go on to drink less than those who sneak beers with friends. Imagine 16-year-olds receiving a drinking permit upon passage of a mandatory course about alcoholism. The permit would allow a tipple only at family gatherings or school functions for two years — until you graduate or leave home.

The phasing in of credit cards at 16 could work with firm restrictions. A parental co-signer should be required until young applicants have made a year of on-time payments from their own wages. The most important requirement would be passing a mandatory financial literacy test. The applicant would define “compound interest,” correctly decipher the fine print on a credit card agreement and argue with a robotic customer service representative over a mysterious fee. Surely this graduated system would be safer than handing young people a $2,000 line of credit just as they leave home for the first time.

The more we treat teenagers as adults, the more they rise to our expectations. From a developmental and vocational point of view, the late teens are the right starting point for young people to think seriously about their futures. Government can help this process by bestowing rights along with responsibilities.

Tying adult rights to cognitive requirements could also smooth the path to dealing with a much bigger age-related social problem. Demographically, those over 85 are our fastest-growing group. By 2020, the entire nation will be about as silver-haired as Florida is today. We need to be able to test Americans of all ages, to make sure they’re still qualified to drive and to help them avoid financial scammers. From a public health point of view, the silver tsunami poses more of a threat than marauding teenagers ever did.

Anya Kamenetz, a staff writer for Fast Company, is the author of “Generation Debt.”

Lawyer-Blogger of the Year Laments High Debt,Poor Prospects

From Wall Street Journal's "Law Blog": "his [or her] claim to fame? For over a year, Loyola 2L has beaten a loud and consistent drum of discontent around the Web by posting in online forums about the job prospects for graduates of nonelite law schools.

A comment from last summer was typical: “Two years ago I stupidly enrolled in Loyola Law School, thinking it would lead to a decent job,” he wrote. “Now I’m in massive debt and have been taught a hard lesson. … Students from tier 2 schools aren’t allowed to have good jobs, despite all the money and work we put into the education.”"

Cut-Rate Ivy League

My latest column on Yahoo! Finance takes on the recent financial aid announcements by Harvard,Yale, and half a dozen top private universities.

I believe it's now time for families and communities to push for more accountability and transparency on the part of public institutions. Colleges need to show that they can be efficient in their use of resources and do more with less. Competition and smart consumer choices by students and families will ultimately be just as important to holding down college costs as contributions from the public and private sector combined.

McDiploma

In Britain you can now earn nationally recognized school credits through the employee training program at McDonald's.

"Prime Minister Gordon Brown enthusiastically praised the program, along with related plans to expand the number of apprenticeships for young people. Addressing a conference of business leaders Monday, he spoke of historical importance for the British economy: "A generation ago, a British prime minister had to worry about the global arms race," he said. "Today a British prime minister has to worry about the global skills race."

He added: "The biggest barrier to Britain's success in the jobs of the future: a skills deficit particularly amongst the low paid."

This is true, but can you really overcome the skills deficit by rebranding the training programs for low-skilled jobs? What I know of jobs at McDonald's (see Fast Food Nation), they have been systematically de-skilled, so that you barely have to read or add to nuke the food and push the buttons at the register (which have pictures of the dishes on them).

Youth unemployment remains quite the scourge in Britain as indeed throughout Europe. Still, higher education in Britain is in an interesting state of transition. Up to the 1990s, even ,they had many fewer people enrolling in college than we do. Now they have more short, topical programs with much lower fees than we do in the US, with what is meant to be better paths to employment. You can also receive government support as a young person under 25, including months of paid job training and employment counseling.

Army Lowers Recruiting Standards Again

Fred Kaplan at Slate has been on top of this issue for a while. He writes:

"The latest statistics—compiled by the Defense Department. and obtained through the Freedom of Information Act by the Boston-based National Priorities Project—are grim. They show that the percentage of new Army recruits with high-school diplomas has plunged from 94 percent in 2003 to 83.5 percent in 2005 to 70.7 percent in 2007. (The Pentagon's longstanding goal is 90 percent.)"

This is by way of 1) weakening our national defense and 2) making a back-door draft so that poor and minority kids in both urban and rural areas who go to crappy schools with lower graduation rates (the American high school graduation rate has been declining for 40 years, says a new paper) are more likely to fight and die in wars.

New Research: Young People Don't Have Our Heads Up Our Asses

At least not any more than any young people at any time, ever.
As the Times reports, a new book is coming out repudiating Jean Twenge's odious Generation Me, which purported to show through research that young people these days scored higher on the Narcissistic Personality Inventory than previous generations (research that was never published in a peer-reviewed academic journal until after her popular book was published.)
The new researchers use the same data to show not much has changed.
The Times quotes an intelligent and nuanced observer of the younger generation, who I also quote in my book:

“It’s like a cottage industry of putting them down and complaining about them and whining about why they don’t grow up,” said Jeffrey Jensen Arnett, a developmental psychologist, referring to young Americans. Mr. Arnett, the author of “Emerging Adulthood: The Winding Road From the Late Teens through the Twenties” (2004, Oxford University Press), has written a critique of Ms. Twenge’s book, which is to be published in the American Journal of Psychology.
Scholars including Mr. Arnett suggest several reasons why the young may be perceived as having increased narcissistic traits. These include the personal biases of older adults, the lack of nuance in the Narcissistic Personality Inventory, changing social norms, the news media’s emphasis on celebrity, and the rise of social networking sites that encourage egocentricity.

I agree, except:
-Popular obsession with the doings of celebrities, as distinct from the portrayed attitudes of the celebs themselves, doesn't necessarily have to do with narcissism. It's just gossip, fodder for discussions about social norms, relationships, romance, and all the other juicy bits that hold a society together. It's also a source of powerful imagery that mainly makes young women feel bad about their bodies & themselves--not really amplifying narcissism.

-Social networking sites don't necessarily encourage egocentricity. This betrays a fundamental misunderstanding of social networking. Yes, you build your profile page, and you're concerned about your popularity, but you spend most of your time on other people's profile pages, sending messages, sharing photos, planning events. They call it social networking for a reason, not "me" networking.

Why Do We Go to Work?

My latest Yahoo! column pulls together some ideas I've been mulling over for a while about happiness and changing job expectations.

"What really intrigues me about the trend of youthful idealism is the way it contrasts with young people's actual experience of the changing work world. Workers younger than 30 are the largest and fastest-growing uninsured group in the country -- two out of five recent college graduates go without health coverage."

The Freelancers Union, which I highlight in the article and which I have been connected to in the past, is going through some growing pains. They transitioned to a new insurance carrier and members were frustrated as their phone systems were overloaded, leading them to send out a series of apologies.
On the other hand, I also hear their members are going to be featured on the PBS newsmagazine NOW. I'm betting they continue to grow into their role as advocates for the new independent workforce.

PS. I think it's kind of hilarious that certain Yahoo! commenters refer to me as MANya. These individuals also tend to be male, have poor spelling skills and right-wing political views--not that I'm in any way implying a connection.

Bad news for the economy, good news for GenDebt

Fascinating story by my college classmate Michael Barbaro in the NYTimes.
"The country may be experiencing a rare decline in personal consumption, not just a slower rate of growth. Such a decline would be the first since 1991, and it would almost certainly push the entire economy into a recession in the middle of an election year".

Of course a downturn in spending on stuff like video games and designer bags is bad news for our consumer-oriented economy. But it's good news for individuals, if it means they are being more realistic about tradeoffs and living within their means. Interestingly, the authors choose to quote a 22 year old to that effect, maybe because of their reputation for profligacy.

"Jinal Shah, 22, a college senior in New York, said she wanted to buy the popular Nintendo Wii video game system as a gift for herself this holiday season, but had second thoughts because of the $250 price tag. She ended up not purchasing it.

“You have to make choices,” she said. “I get the Wii, or I go out more. I am just much more aware of the tradeoff now.”

Rich-Kid Syndrome

Back when I was doing the Generation Debt column for the Village Voice, one of the toughest columns to report was the one on rich kids. Nobody really wants to talk about their money--there are still people who aren't speaking to me over it.
New York magazine, which can fairly be accused of fetishizing wealth, did an interesting take on the story last week, which is currently the top most emailed story.
The angle is pretty similar to my story, and that of the 2003 documentary Born Rich: how can young adults with stupid amounts of inherited wealth--or even the children of the merely affluent--acquire values and a sense of purpose?

Now, to many, a better question might be, who cares? These are rich-kid problems.

However, these existential dilemmas afflict a broader range of young people in our extremely affluent society--children of professionals, not just the super-wealthy, and I've heard the same complaints from children of immigrant success stories, ie, my father came from Fujian and worked 100 hours a week, how can I ever hope to match that?

Work is never just about the money, it's about carving out your place in society no matter where you come from.