Imagining the Future of Global Warming

I think this is a brave, important piece. It's about envisioning what we need to do--not just wringing our hands.

Climate change should be the primary driver in our biggest decisions over the next 20 years. It should define our major economic investments, tax policies and foreign policy. It is that big. It is that big of a threat, that big of an opportunity. It is not merely one of many important issues -- it is the issue that will define our generation. It is our destiny.

Wages Up, Workers Scarce in China

Fascinating. It had to happen I guess.

The shortage of workers is pushing up wages and swelling the ranks of the country's middle class, and it could make Chinese-made products less of a bargain worldwide.

They say lower down that the number of Chinese people enrolled in college has tripled since 1999, to 14 million (US has 15 million). And minimum wages are up 25% in three years in the big cities.

Reprint in the Times

A little article I wrote last month for Men's Health on "What's Your Spending Style?" rated a mention in the Saturday business section of the NY Times.

..And A

I was recently talking to a Democratic strategist who believes in a strong progressive majority among Gen Y (born starting in 1978 or 1982 depending on who you ask); under-30s were the only age group to vote for Kerry, 54-46, and they have become even more progressive according to polling since then. This is a large generation and will make up a larger proportion of the electorate in 2008 than in 2004. (For more info on the 2004 youth vote, go here).

Ideally, this could translate into support in 2008&beyond for candidates who offer a new New Deal to American workers: portable, affordable health care benefits, a federal living wage, and a retirement system that really works, protecting the most vulnerable workers while fairly distributing resources among the generations. Oh, and reining in of the predatory credit industry that drives so much misery. This is the largely economic progressive vision shared by groups like ACORN, Jobs with Justice, Jobs for the Future, and many others. The "new generation" I referred to means not only groups I talk about in the book, like Working Today, TechsUnite, Young Workers United, but a whole cohort of college-educated progressives who came up through programs like Union Summer, or were exposed to union organizing by graduate students on their campuses. They believe in social movement unionism as an outlet for progressive action.
Of course, this progressive dream runs smack up against America's precarious strategic and financial situation: the record deficits, growing trade imbalances, outsourcing, losing ground in education, and demographic shift. It could be that the New Deal analogy is all too apt: it could take an economic collapse to spur a radical expansion of economic protections.
In the long term, I believe that America will finish out the century as a great power, but not the Great Power.

Q...

I got an interesting question via email yesterday and wanted to try and answer it here.
I'm a 28 year-old grad student in Chicago. I'm at Northwestern University's Public Policy program (still living at home, naturally). I'm also a Legislative Aide for the Illinois House of Representatives. I was curious as to where you see the whole Generation Debt scenario headed in the long-term. It goes without saying that this generation may very well end on the losing end of history as we shoulder the Boomer's retirement costs and are out-educated by India and China. How do you see the prevailing politics of the under-30s turning out? Do you think there will be a rebellion against a welfare state that's able look after their parents' generation only at an astronomical cost to themselves? You mentioned "a new generation of labour organisers and advocates" coming up. Who are they?

Great Review/Commentary of Gendebt in the Guardian UK

In the States, meanwhile, there is currently much fuss over Generation Debt, a crisp polemic by 24-year-old Anya Kamenetz, a Louisiana-born Yale graduate who writes with the same elegant indignation that defined Naomi Klein's No Logo.

40,000-strong LA School Walkout Protesting Immigration Reform

And they say kids today are apathetic.

The protests are believed to eclipse in size the demonstrations that occurred during the anti-Proposition 187 campaign in 1994 and even a famous student walkout for Chicano rights in 1968.
"It was my dad's and grandfather's sweat and tears that built the city of Los Angeles," said Marshall High School senior Saul Corona, whose father came to the United States illegally before getting a green card. "People like them did things no one else wanted to do because they wanted me to have a better future."

The protests appeared to be loosely organized, with students learning about them through mass e-mails, fliers, instant messages, cellphone calls and postings on myspace.com Web pages. By contrast, the massive rally Saturday that drew 500,000 people to downtown Los Angeles was highly organized, with demonstrators urged to wear white and bring American flags.

Sallie Mae: "March Toward Monopoly"

Excellent story in the Chronicle on consolidation in the lending industry. Explains the background of what's happening now.

Congress created the Student Loan Marketing Association as a government-sponsored enterprise in 1972 because policy makers at the time feared that banks alone would not have enough money to meet student demand for loans. Sallie Mae, as the entity soon became known, was directed to use U.S. Treasury funds to purchase government-backed loans from banks, providing the banks with money to make more loans.
By the 1980s, Sallie Mae was doing so well that it no longer needed direct federal financing to purchase loans; instead it turned to Wall Street. Because of its implicit backing from the government — lowering the risk of defaults because the government would cover nearly any losses — it was able to raise enormous amounts of capital at low interest rates to buy and service student loans. In the process, it racked up tremendous profits.
Sallie Mae's assets multiplied eightfold during the early 1980s and early 90s, as federal student-loan volume soared.

But the financial success also attracted more scrutiny. Reports that the top officers of the Congressionally chartered corporation were pulling in seven-figure salaries led to charges in Congress that Sallie Mae and other loan providers were getting fat off the loan program, at the expense of students and the government.

The Clinton administration and Democrats in Congress pushed to remove banks and other lenders from the federal loan program altogether. Congress approved legislation in 1993 to gradually replace the guaranteed-loan program with direct lending, in which the Education Department provides loans directly to students through their colleges.
Sallie Mae's livelihood was suddenly threatened, and the company's leaders knew that its future depended on cutting ties with the government, so that it could diversify the products it offered. In 1996 the Clinton administration and Congress granted Sallie Mae its wish, allowing it to gradually become completely private.

Some of those who were involved in the Clinton administration's deliberations, however, believe that the government seriously misplayed its hand.
Thomas R. Wolanin, a longtime Democratic aide in Congress who served on a government committee that examined the possible sale, says he felt throughout the discussions that the administration was "giving the store away."
"My basic feeling," he says, "was that we were allowing Sallie Mae to privatize with very little financial return to taxpayers for the benefits they had received as a government entity, and without harnessing them to some public purpose."

Now they're preying on nonprofit loan agencies in a series of hostile takeovers.

Good News from NY State

from NY PIRG:the Senate and Assembly joint budget agreement for higher education for 2006-2007: "This is the best budget for higher education that New York has seen in a generation," said Miriam Kramer, NYPIRG's government policy analyst. "The governor must sign this legislation into law to leave a legacy of a more affordable, accessible, quality education for New York's college students and families."

"The Senate and Assembly agreement includes important reforms to the Tuition Assistance Program," added Kramer. "If approved, this budget will allow part-time students to receive grants and students whose family income decreases to adjust their awards in the middle of the year, allowing TAP to better meet the changing needs of today's college students."

The Illegal Dilemma

In light of the current immigration debates in Congress, the Washington Post runs a story that businesses are complaining that they must rely on undocumented workers because Americans won't do the same kind of backbreaking work (eg landscaping) for pitiful wages. Is this an expectations problem or an exploitation problem?

"Here lies the dilemma facing Congress as it attempts an immigration overhaul. Businesses say it is hard to persuade Americans to perform the unskilled jobs that immigrants easily fill. Significantly higher wages might work, but that increase would be passed on to unhappy consumers, forcing Americans to give up under-$10 manicures and $15-per-hour paint and lawn jobs."

Let's see, low prices on nonessential services vs. a just society. I'm thinking, I'm thinking...

Wow! Thanks for your Comments!

My C-SPAN appearance this morning garnered an unbelievable 25 emails, almost all positive. This for a show that aired from 8:45-9:30 am! Lots of people asking for help and advice and I know there is a huge need out there.

This is one of the best news I've gotten-- a small indication that this work is making a difference:

I heard you on Minnesota Public Radio a few weeks ago and used much of your logic in a proposal I made to our recent DFL caucus. The proposal asked that the ratio of Annual Tuition/minimum wage at UM at Duluth (UMD) be returned to the 1952 ratio (when I started college) which was: $99/$1.19. The proposal was accepted and is going to the next level (county) on 4/1.

Author Interview on Slushpile.net

I thoroughly enjoyed doing this interview for Slushpile, a website geared to aspiring authors. It's a pretty cool site with original content and information sure to appeal to all book lovers.

Le McJob

A commentary by me at TomPaine.com on the parallels between the situation of French and American youth. What do you think would happen if 5 million young people (the equivalent of 1 million in France) took to the streets to demand higher pay, health benefits and job security?
They'd probably be laughed at. Those safeguards are not part of the way American society imagines itself, not right now.
But there must be a happy medium. After all, we do have such a thing as a minimum wage, even if it's routinely violated. We could stand to raise the floor a tiny bit without creating a nation of plaideurs (plaintive plaintiffs, pleading whiners), as my dad would say. And everybody agrees on education as a means of providing people with bootstraps--the central point of my piece.
A great commentary that ran last week on the same website, on a related note: "Wanted: a High-Road Economy."

Want to Be on TV?

A major news network is looking for soon-to-be college graduates with hefty loans for a documentary-style piece. If you are interested in speaking up about your situation, please get in touch!

Hollywood Squares

I was on CNN Headline News tonight (rebroadcast at 12:47 am) and you can catch me on C-SPAN's "Washington Journal" this Saturday morning.

Must Read Column on Sallie Mae

by Alan Collinge, activist-turned-pundit (I wrote about him here) of Student Loan Justice, in the Baltimore Sun:

...

Judging from the weight that Sallie Mae - otherwise known as the SLM Corp. -
throws around inside the Capital Beltway, one has to wonder if Congress has been
fooled as well. Since its privatization began in 1997, Sallie Mae has led a relentless
lobbying effort that has stripped nearly all consumer protections from student
borrowers.

To put it in perspective, Sallie Mae executives gave more than twice as much
to elected officials as Fannie Mae, a mortgage holding company roughly 20 times
larger. And the payoff was huge. Refinancing is now illegal (consolidation is
allowed one loan at a time, but only with the original lender). Bankruptcy is
now off the table for federal and private loans. Huge penalties and fees are
permitted on delinquent debt.

Best Job Market in 5 Years for College Grads

Hottest fields: business, computers, engineering, education, health care.

State Support for Higher Ed at 25-Year Low

Enrollment up, inflation up, support stagnant = per-student state support at a 25 year low.

"Students from low-income families appear most likely to feel the squeeze. From 2001 to 2005, enrollment grew by 14.3 percent at public institutions and inflation grew by 14.2 percent, without corresponding increases in public funds, according to the annual study, which was released today by the association of State Higher Education Executive Officers."

Win a Trip to East Africa

Nicholas Kristof thinks America's college students need more experience of the wider world. So he's sponsoring a contest to take one lucky student on a reporting trip to East Africa with him. Awesome!

Students Confront Higher Ed Policy Advisors

Meanwhile, in Boston, my friends at the PIRGs showed up at a public meeting of the Commission on Higher Education and managed to get students' voices heard.:

To draw attention to rising student indebtedness, the United States Students Association and the Public Interest Research Groups held a lunchtime news conference across from the hotel where the hearing was held. Holding a sign that read "Student Debt Alert" and wearing buttons that read "Say It Loud: Grant Aid Now," students said that educational debt is forcing young people from low-income families to forgo college and is discouraging college graduates from entering public-sector jobs...."Students are entering the economy a slave to Sallie Mae," said Joshua Chaisson, a student at the University of Southern Maine.

The 19-member commission was created last fall and charged with developing a national strategy on higher-education. It is scheduled to present its recommendations to Secretary of Education Margaret Spellings by August 1.

Worse off than our parents, sez Harvard prof

I was part of a most illuminating policy panel on "does college cost too much?" at the American Enterprise Institute yesterday. It is normally maligned (by me) as a conservative thinktank but I was really impressed with the other presenters and the audience. The presentation was on C-SPAN live and I got about a dozen nice e-mails from people, which probably represents 1/5 of the audience. You can read the coverage here:

As tuition prices have skyrocketed since the 1970s, the inflation adjusted average earnings of a graduate from a four-year institution have stayed about the same, according to Susan Dynarski, associate professor of public policy at Harvard University and research fellow at the National Bureau of Economic Research. Compared to 30 years ago, students are “looking at level earnings, but increasing debt,” she says, so “from the perspective of their parents’s generation, they’re actually worse off.”
The other presenter was Martha Lamkin of the Lumina Foundation the research of which I drew on in the book.
UPDATE: BTW, a bit of fact-checking; the reporter said I said that the US spends more than any other country on higher ed as a % of GDP. Actually I said, as the OECD reported last fall, that the US spends double the OECD average at the postsecondary level, or $20,545 per student.

On the Air

Here's an interview with me on KALW, one of SF's 3 public radio stations...I have now been on all 3...starts out with a nice commentary by a young lady in credit card debt.
and here's one with Bill Thompson of "Eye on Books" which despite the name is a radio show/podcast out of DC...the only daily author interview podcast!

Personal Finance Pitfalls

Gen Y (along with every other generation) doesn't act rationally or perfectly when it comes to 401 (k)s. (when we have 401 (k)s. Part of this has to do with the naturally irrational way humans as economic actors perceive risk. It is more important, for example, to avert a loss of $1 than gain $1. (Yes, you read that right; it's all in how you present it). The same concept--debt aversion--holds true when young people are deciding whether to go to college. An NYU real-world trial I heard about today offered two identical deals to law students: you go to school debt-free but you must repay your tuition if you DON'T go into public service, OR you go to school with loans that are then repaid when you DO go into public service. Participation was much higher in the first deal, though costs were the same.

Gen Debt France

I have been watching with much interest the youth protests going on in France because of the new job law. It's definitely a Gen Debt thing:

With nearly 1-in-4 French youths and young adults unemployed, many fret about how they will find work, make their first down payment on an apartment, afford to start a family.

They study, earn diplomas, but often are resigned to finding nothing more rewarding after graduation than unpaid internships. The most disenfranchised -- immigrant youths in depressed neighborhoods that went up in flames during riots last fall -- don't even expect those.

Some Cuts to Ed Budget Restored

"The president's budget would provide $137.5-billion for health, education and labor programs in fiscal year 2007, $4-billion less than in fiscal 2006. That follows a $1.9-billion cut to these programs in fiscal 2006.

Mr. Specter's amendment would return spending on these programs to fiscal 2005 levels. "

Among those spared the ax--for now--are the Perkins loan program (low-interest loans for low-income students) and GEAR UP, one of the TRIO programs to help low-income kids get to college.

Congress Votes to Raise the Debt

The Senate voted narrowly today to raise the national debt limit to nearly $9 trillion, averting what would have been the first default ever on United States Treasury notes and giving Democrats an opportunity to portray Republicans as reckless with the people's money.

"Maxed Out" Credit Card Doc

debuted at SouthXSouthwest last week. The "SuperSize Me" of this debt thing. From the synopsis:

Maxed Out exposes the modern debt-style in all of its absurdities and contradictions. Nowhere are these more evident than in a journey with award-winning investigative journalist Mike Hudson, who travels to Mississippi, Pittsburgh, and New York City interviewing the victims of predatory lending scams. The most shocking discovery? The predators aren't boiler rooms or goodfellas. They are the nation's largest and most respected financial institutions! And they're not just preying on adults anymore. In 2001, FirstUSA hired two teenage high school students as walking billboards to make their cards seem "cool". FirstUSA also pioneered "partnerships" with colleges—paying them millions of dollars for access to their students' personal information, setting these kids up for ruin.

Maxed Out examines an industry that thrives on making people fail, then pursues them relentlessly to death's door.

Ps. also at the fest? another doc, FIRED!

"So How Scared Should We Be?"

Kevin Phillips' grim new book, "American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century," puts the country's degeneration into historical perspective, and that perspective is not conducive to optimism. The title is a bit misleading, because only the middle section of the book, which is divided into thirds, deals with the religious right. The first part, "Oil and American Supremacy," is about America's prospects as oil becomes scarcer and more expensive, and the last third, "Borrowed Prosperity," is about America's unsustainable debt.

Tart Commentary from Anchorage, Alaska

On the trend of boomerang-themed TV and movies like "Failure to Launch," and the new "Free Ride."

Unlike the real-life 20- and 30-somethings documented in Draut and Kamanetz’s books, Nate, Amber and Mark do not suffer from the machinations of greedy, government-subsidized lending corporations, decreased job opportunities and wage buying-power. They do not lament college tuition’s inverse relationship with the dwindling amount of federal aid made available each year to students.

In “Free Ride,” the men of the boomerang generation suffer only from a lack of character and self-sabotage...

As with many other recent television series that purported to reach out to our demographic but insulted our characters and our intelligence instead, it’s hard to decide whether “Free Ride” is more deplorable because it’s so offensive or because it’s so lame.

K-16

A special report earlier this month from the Chronicle of Higher Ed on the transition from school to college. Lots of good stuff in there from both sides. I particularly liked the debate on whether cost or preparation is more important in determining who goes to college.

New Ad Campaign on Social Value of College

Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education ... said that colleges have done a poor job in educating the public about the critical role colleges have played in enhancing "America's economic competitiveness and social well-being."

That failure has been costly, he said. Over the last two decades, state spending on higher education on a per-student basis has dropped significantly. Meanwhile, federal support for student aid is flagging, and policy makers are increasingly questioning the quality of education that colleges are providing.

Many Jobs Lack Benefits to Cut...

sez The Onion.

LA Times Review

"bold and thought-provoking ideas" (I'll take it.)

Consolidate Student Loans by 6/30!

"There's been a lot of media coverage lately of how interest rates on new student loans are rising because of the recent Deficit Reduction Act. This coverage, however, obscures a far more important and actionable event. Interest rates on existing student loans are set to rise by over 1.6% based on the most recent Treasury bill auction. The repayment rate for existing Stafford loans to students would be 6.93% based on that auction, a rate higher than the 6.8% rate for new loans. There is good news, however, because borrowers who already have student loans can lock in their existing interest rate, which could be as low as 4.75%, by consolidating prior to July 1."

The Kalamazoo Promise

An innovative proposal (WSJ online):

...an unusual, anonymously funded plan. Beginning this June, college tuition will be free for any student who enters the Kalamazoo school system by the ninth grade -- regardless of income or need. The program, unveiled in November by the city's superintendent of schools and underwritten by a group of local philanthropists, is to run for at least 13 years.

With its commitment to the Promise, Kalamazoo is upsetting the traditional economic-development model. In the past, blighted cities across the nation signed onto various types of revitalization plans. Mainly, they focused on physical improvements -- including new public spaces, office parks and other civic amenities -- in hopes of spurring economic and social progress.

The Promise is different. By making education the cornerstone of the city's turnaround plan, Kalamazoo is hoping that other positive changes will follow.

Mr. DeHaan, the developer, says the Promise already has helped fuel housing demand...Southwest Michigan First, a regional development agency, says the number of inquiries from small businesses has recently quadrupled to between 20 to 25 calls a week.

...The donors think the Promise "is the way to revitalize their city," says Dr. Brown, who is one of the few people in the city who knows their identities. They believe that "equal access to higher education for all creates a powerful incentive that will bring people and employers back to Kalamazoo."

Huh!

Send 'Em Back to Work

One topic I almost always cover in talks is the demographic shift in store with the aging of the Baby Boomers. Now the Census Bureau comes out with a report that the aging of America isn't going to be as much of a problem as we worried because older Americans are getting healthier (and richer, and better educated). So, to bring Social Security back into balance, we should raise the retirement age at once.
"Seldom does justice so perfectly suit convenience. Raising the retirement age would honor the principles of productivity and self-sufficiency that originally defined the age group deserving of benefits."

To the Lobbyists

Here is part of an email I sent to a student loan industry lobbyist yesterday. He had contacted me seeking to give me the industry's side of the story on guaranteed vs. direct loans. I haven't heard back from him quite yet.

My impression of the lending industry's arguments are as follows:
1) With cash-basis accounting, the budgetary advantages of the direct loan program seem to disappear. While nevertheless reestimating a subsidy of $9.20 per $100 for FFELP and $1.70 per $100 for FDLP, the GAO has acknowledged that judging the true costs of each program is difficult. Lenders also argue that these budget estimates don't account for tax revenues recouped from the private businesses involved in the industry.

2) Many schools have left the direct loan program for FFELP over the last 10 years. Incentives provided by FFELP can make loans cheaper for students. Competition between the two types of industries makes for a better program.

3) The banks do a better job of administering and servicing loans than the federal government.


My responses are as follows:
1) "Cash basis accounting is inappropriate for financial institutions making long-term commitments." ("Student Loans: A Budget Primer", Center on Federal Financial Institutions, 11/8/05) I have yet to find a source, not in the direct employ of the student loan industry, which claims that FFELP costs the government less than direct lending.

2) The direct loan program is restricted by law from offering the same incentives as FFELP. While these incentives have influenced schools to switch, and they do make loans cheaper for students, federal legislation could reverse these conditions with a stroke of the pen.

3) I agree. I have it on good authority that the student loan program is professionally and efficiently administered by the professionals in private industry, and those who have come from private industry to the FSA. The creation of the FSA was an attempt to bring these best practices into the federal government, and I believe that FDLP can do just as well with political will behind it.

2 Letters from This Morning's Inbox

1) i'll be getting my bachelors degree in poly sci practically on my 30th birthday next spring and im starting to consider and plan for law school... today in an effort to do some research on schools i happened upon your book in a barnes and noble, felt compelled to pick it up and then i COULD NOT put it down. thats rare but even rarer i bought the book on the spot and have been reading it ever since! while reading i had to look over my shoulder. i felt like you've been freakishly watching me for the past decade...if i had the money i would buy every baby boomer i know this book.

2) I read a Blog by Amy Baldwin (Charlotte Observer) about your book Generation Debt. I haven’t read it, but I am tempted to. (I will probably have to wait till tax season is over) I just wanted to give you my first thought of classifying our generation like that. I think it is completely wrong. From what I have gathered, your book talks about how bad (financially) our generation has it. That is sucks to be us.
I should write a book to counter yours, called “Generation Entrepreneurs”, and talk about how great our generation has it, how much we have already contributed to the capital economy, and prelude to the great things we are going to do. (My only constraint is my writing skills match Tarzan)

SL Consolidation= Gross Monopoly

I missed this column the first time, but I'm posting it again from the Providence Journal:

Republican legislation to kill competition for the 30 million people who hold student loans did not get that much attention in December. Most people have been focused on how Congress raised interest rates on these federally guaranteed loans. But this action to restrict competition is potentially more far-reaching, and more damaging to students, and to efforts to reduce the federal budget deficit.

It happened two ways: First, Congress maintained a law called the Single Holder Rule, which says that once you have your student loan from one company, you cannot change companies. Second, once you refinance the loan, you cannot do so again, no matter if a different company offers better rates, longer terms or better service.

Imagine if someone tried to get away with that in the home-mortgage market. They would either go out of business or go to jail for price-fixing -- or both.

Then Congress went one step further. Led by Congressman John Boehner (R.-Ohio), then head of the House Education Committee and now House majority leader, Congress took the single most anti-competitive provision in all of American law since the wage and price controls in the early '70s, and made it worse. Congress effectively banned anyone from locking in low rates for longer terms.

The people at the largest student lender, Sallie Mae, were ecstatic. They had beaten their competition -- not in the marketplace but in the lobbying place.

Loan Forgiveness Programs

People who may be eligible to have their federal student loans forgiven: Nurses, daycare workers, teachers, Army National Guard, Peace Corps and Americorps volunteers, federal employees, and state troopers in Alaska.

Some Recent Coverage

The Bob Edwards show on satellite radio.
An Albany, NY paper.
A credit card webguide.
The U Maryland paper.

Law Students Sue UC for Raising Tuition...

And win!
A California judge has ordered the University of California to pay $33.8-million to former students who accused it of breach of contract when it raised tuition over the past three years despite an apparent pledge not to do so. The class-action lawsuit represents a rare victory for students in litigation over tuition increases.

or maybe lose...The financial impact of the judgment on the university system and how to recoup the money will be considered by the regents after all appeals are exhausted, Mr. Vazquez said, but the ruling could mean further tuition increases for professional students.

Great Article about Jobs, Skills, and Global Markets

in the LA Times.
Striking facts:
1) As many as 45 million American jobs may be vulnerable to offshoring, including high-skilled service jobs, as communications technologies improve. The returns to a college education have stalled since 2000.
2) Education is not enough to stem the flow of jobs overseas. The lower cost of labor overseas may ultimately be more important.
3) Bush's support of education has been "anemic." The growth in financial aid spending since he took office is entirely attributable to the fact that more students qualified; average aid per student hasn't budged. The purchasing power of the maximum Pell Grant has declined from 42% of the average public U cost to 33% since 2002.

Live Chat Monday March 6!

Go to Campus Progress for a LIVE CHAT with me at 5 pm Monday.

2 new interviewshttp://www.blogger.com/img/gl.link.gif

Charlotte Observer (check out finance columnist Amy Baldwin's blog, too)
and U-Wire, which goes to colleges all over the country. (Note, there is a typo in this one; the Higher Education Act passed in 1965, part of the War on Poverty.)

Also, there was a great article in the Chicago Tribune on student loan debt. People are really catching on to this problem!

Thoughtful Review in SF Chronicle

First I reviewed Liz Perle's book. Now our books are reviewed together:

Thankfully, the liveliness of Kamenetz's mind mitigates the bleakness of her portrait. A 24-page bibliography reveals her as a wide and careful reader, and she performs an energetic if procedural diagnostic on the decried, double-crossing system.

DC Public Affairs Radio

I'll be on the Kojo Nnamdi show today, Thursday, from noon to 1 pm. Listen here.

Moneypants Interview

Check it here.
Moneypants is a great site built around an online tool designed to help 20somethings manage their finances. I don't feel the need to (read: I am not organized enough to) have everything tracked like this but for a certain kind of person it could work great. Plus they have a lot of cool content on the site including interviews and True Confessions.

PS: As a commenter pointed out, the budget tracker on the site is a pay service, which makes it, hmm, a little less appealing to people who are watching their spending very carefully. But I still think it's a good place to look around.

Tech Professionals Head back to India...

sez Washington Post.
"If you want to be in the latest trends, you have to be in India," said Dutt Kalluri, who heads data warehousing and business intelligence at the information-technology division of Larsen & Toubro Ltd., India's largest construction and engineering company. "Technology development happens in India. Technology consumption happens in the U.S.

Now I know, in the '80s we were all worried about Japan taking over, Rising Sun style, and that didn't exactly happen. Is it really different now with India and China, two superpowers, each much bigger in size than the US?
It feels different, but I don't know.

All 50 States Face Fiscal Crises by 2013...

and will not be able to support spending increases, causing state appropriations for higher education to suffer.
This according to a new report by the National Center for Public Policy and Higher Education. Among the factors: Medicaid costs, less federal help, and a loss of state sales tax receipts to Internet commerce.
"For most states, it is difficult to see a future for higher education that recreates the prosperity of the late 1990s," the analysis concludes. "Colleges and universities -- and the students who enroll in them -- are more likely to face continued financial strain."

The late 1990s? When tuition rose by 25% (as opposed to 57% in the early '00s)? That was prosperity? Oh.

Catch me on the Brian Lehrer show this Morning

Listen here.

Another Factoid from the 2006 Economic Report of the Prez

(see below for link)

"Immigrants make up an increasing share of the scientific workforce."
43% of PHD science and engineering professionals were foreign-born in 2002.

Lots of info on the US losing ground in education, especially math and science.

Wal-Mart , Under Pressure, Sweetens Health Care Offerings

....including opening more clinics in stores and shortening the period that part-time employees have to wait before they can buy coverage.

The world's largest retailer also said it would expand its cheapest health insurance option, an $11-a-month plan that has been offered in selected areas. The "value plan," which costs about $20 for families and allows three doctor visits and three prescriptions before a $1,000 deductible kicks in, will be offered to half of the company's employees, Wal-Mart said....

The company said the number of employees covered by its health plans increased slightly last year to 46% — below the national average of 60%. It said almost one-third of its workers get health insurance elsewhere, which critics say is evidence that the retailer relies on state programs and other companies to cover its workers.

My Nondenominational Jewish Prayer Group Made Time Magazine

Props to Zach and the rest of "Voice of the Village!"

Are you from Atlanta?

A TV journalist just might want to talk to you for a GenDebt segment. Drop me a line on the blog or at akamenetz (a) villagevoice.com.

America's Young Workers Behind in Income

A new survey shows that median incomes fell for households under 45, even as they rose for older ones, between 2001 and 2004. Income fell 8 percent, adjusted for inflation, for those under 35 and 9 percent for those aged 35 to 44. The numbers add new weight to longstanding concerns about whether younger generations of Americans will achieve living standards that are better - or at least equal to - those of their parents.

UPDATE: Krugman sez: What we're seeing isn't the rise of a fairly broad class of knowledge workers. Instead, we're seeing the rise of a narrow oligarchy: income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite.

...Highly educated workers have done better than those with less education, but a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. Over the longer stretch from 1975 to 2004 the average earnings of college graduates rose, but by less than 1 percent per year.

So who are the winners from rising inequality? It's not the top 20 percent, or even the top 10 percent. The big gains have gone to a much smaller, much richer group than that.
A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, "Where Did the Productivity Growth Go?," (PDF) gives the details.

How About, The Nature of Life is Suffering?

Washington Post weighs in: Phew, talk about a book you probably won't see on any critic's summer beach reading list. Apparently "Life's a Drag and There's Nothing You Can Do About It" was already taken.

A tiny window into my mind...

In its smallest, most nervous recesses...
What Amazon Sales Ranks Mean:

Books with sales ranks between 1 and 10,000 are re-ranked every hour. The rank depends both on how many books sold the previous hour relative to all the other books on Amazon, plus the recent sales trajectory. A book that holds steady in this range is usually considered commercially viable by trade publishers, [whew!] and means substantial income if you're self-publishing books. Since ranks are relative and overall book sales vary with the time of year, there is no exact formula for describing a sales rate. Books with a steady sales rank near 10,000 are averaging sales of more than one copy a day. Around sales rank of 1,000, the sales rate approaches ten copies a day. Keep in mind that some of these ranks are occupied by books that sold many thousands of copies on Amazon during their day in the sun, and hold onto a good sales rank for years because that initial surge of sales keeps their "average" above that of most other books. Books with steady sales ranks below 1,000 are selling very well, topping several dozen copies a day as you approach 100. I don't have any hard data on the top 100 books, but I'm sure it puts a smile on the face of any trade publisher to have a book selling that well, independent of the season and the competition.

My top rank so far is 2,577. Averaging around 8,000...

2 New Profiles o' Me

Baltimore Jewish Times
and Yale Daily News ("blonde and bubbly"? lame, girl.)

Fiercely Critical of Debt Moralizing

Talk of overconsumption cruelly obscures the real issue, say Elizabeth Warren & her daughter in this excellent Boston Review article.

I Love This Man

Tonight on the Daily Show, Jon Stewart introduced the concept of generational equity to his loyal viewers.
(approximate transcript, by me)

The cost of the Iraq war so far ? $2,083 per taxpayer. I know what you're thinking--I could have adopted several Third World children with that money. Or spent it on an eight-ball and a night with a fancy hooker.
But hey, that's not money out of your pocket. We have deficit spending! Borrowing! Don't think of it as $2000 you don't have. Think of it as TWO HUNDRED THOUSAND DOLLARS your GRANDCHILDREN don't have [cut to pic of adorable grandkids]. And seriously! F*ck them! They think you smell like ass!!!!!

A little well-founded alarmism...

On the nature of job market change.
As the friend who emailed this to me says:

This article was written by an editor of the Wall
Street Journal and a member of the Reagan
administration. Not exactly a liberal zapatista ...

Unemployment benefits were intended to help people over the down time in the cycle when workers were laid off. Today the unemployment is permanent, as entire occupations and industries are wiped out by labor arbitrage as corporations replace their American employees with foreign ones.

Economists who look beyond political press releases estimate the US unemployment rate to be between 7% and 8.5%. There are now hundreds of thousands of Americans who will never recover their investment in their university education.

He calls it " a jobs depression."

UPDATE: Here is another take on the same subject: a huge report just came out on offshoring.

USA Today: You're Suffocating!

"It's a real crisis," Cantor says. "You're strapped before you get started."

The average debt for a college graduate has soared 50% in the past decade, after inflation, according to the Project on Student Debt, a non-profit advocacy group. Just as record-low mortgage rates have eased the impact of soaring home prices, low student-loan rates have let borrowers cut their payments, softening the impact of rising debt.

"Low interest rates have served as a sort of amnesty for graduates with debt," says Robert Shireman, founder of the Project on Student Debt. "We haven't seen what the real impact is of much higher levels of borrowing."

Now, with interest rates rising, that amnesty is about to end. The 6.8% fixed rate for Stafford loans, the most popular student loan, will replace a variable rate that used to be adjusted every July 1, based on Treasury bills. Under the old system, borrowers could consolidate their loans when rates were low. And they could lock in that low rate for the life of their loans.

I swear, we have to be coming close to a tipping point on the national issue of debt and accountability--for the lenders and the government. Credit cards, student loans, bankruptcy laws--the model we have isn't working.

PS. If you like really long comment threads, here's one on Daily Kos on this story.

Happy Youth Vote Month!

Young Voter Strategies, a project of George Washington University, is celebrating the 35th anniversary of the voting age being lowered from 21 to 18, in March 2006, by funding several new projects designed to engage young people in the 2006 & 2008 elections. More news soon.

They write:
As I'm sure you know, in 2004 young voter turnout jumped 11 percentage points over 2000, nearly three times the
increase among the overall electorate. More than 20 million 18-29 year olds voted in 2004-an increase of 4.3 million.

Get-Out-of-Debt Books

http://www.amazon.com/gp/product/0062734350/104-1201422-3868703?v=glance&n=283155

http://blogs.savingadvice.com/dmontngrey/2006/02/26/debt-concerns_5818/

A Personal Saving Blog

Fun!

Here's another one http://blogs.charlotte.com/out_of_the_red/2006/02/financial_catch.html

Offshoring: Yea or Nay?

The globalization of increasingly high-skilled jobs is one of the main big-picture job issues affecting Generation Debt. Here's an interesting exchange between an Indian entrepreneur and a high-tech union organizer, Marcus Courtney of Washtech, who I quote in my book.

Soota: Globalization and technology enable every nation to sell globally and source globally. This is not without transitional pain. The pain is equal for a small retailer in India edged out by a global giant and an American whose programming job may go to Bangalore.

But no nation is as well-equipped to take advantage of the emergent phenomena as the United States, because it is a champion of free markets and has a large immigrant workforce with global connections. And Americans are by nature more adaptive, a strength that provides timeless resilience.

Courtney: But there are consequences for that shift. The drivers of the global economy are focused on lowering wages and benefits of U.S. employees. Our high-tech industry has seen little job growth in the more than four years since the recession. If outsourcing is so great, why aren't more jobs being created?

Gen Debt Column

Latest column focuses on a new New Jersey policy aimed at getting young people insured.

Nice Long Interview on Salon

I spoke with Kamenetz at Salon's New York office about some of the psychological motivations behind consumer spending, the changing American workplace, the future of student loans and whether now is really such a terrible time to be young.

Update: there is a really long thread of letters/comments, which is always exciting to see, and many letter-writers seem to "get it."

College Administrators' Raises Beat Inflation...

For the 9th straight year.
The deans' and presidents' salaries are up 3.5%, 4.3% at private schools.

India's Harvard?

It will be a business-sponsored nonprofit:
New Delhi, Feb 16 : Metal and mining giant Vedanta Resources today announced plans to set up a multi-disciplinary university in India, with an initial endowment of one billion dollars, which is likely to start by 2008.

The four-billion-dollar group chairman Anil Agarwal, who apprised Prime Minister Manmohan Singh of the project yesterday, said the company planned to develop the university at par with leading global institutes like Harvard, Stanford and Oxford.

ps: the biz-education connection in America.

On the Subject of Debt

I am devouring the book Confessions of an Economic Hit Man, which an economist emailed me about last week.
It's about debt as a method of imperial expansion and enslavement on a global scale. Kind of like Syriana, but broader.

New Haven Report

Great crowds in New Haven, both at the Master's Tea and at Labyrinth Bookstore, which I recommend as an excellent addition to the city's bookstore scene.

Best audience question: Do you think the gradual divestment in higher education over the last generation or so comes more from the ascendant conservative view of education as primarily a personal investment (vs. a public good) or from the growing political clout of the AARP?

Effects of the Student Loan Cuts

Two common educational loans for middle-class families will have a higher cost starting in July, thanks to Bush's recent actions.

Christian Science Monitor Op-Ed

See it here:
The issue of excessive student debt demands a federal solution, in cooperation with colleges, to hold down costs for students. The alternative is to give a monopolistic lending industry with its own narrow profit motives control over our nation's competitiveness and our children's futures.

UPDATE: In case you are interested, here is the footnoted version I presented to CSM's editors:

You don't have to be in college, or have a child who is, to realize that the student loan crisis is close to a tipping point. In 2004, the average graduating loan burden, $17,600, nearly matched the maximum undergraduates are allowed to borrow from the federal loan program in four years.
total in 4 years: $17,125
Total ugrad limit: $23,000

In the student loan industry's own estimate, 39 percent of student borrowers have unmanageable debt burden after college. That figure includes 55% of blacks and 58% of Hispanics.

For hundreds of young people across the country whom I have talked with over the past two years, unmanageable debt burden has a very specific meaning. Before they ever get to college, it means downsizing their choice from a public university to a regional state college, to a community college, or a trade school. While they're in school, it means working more hours (an average of 30.5 per week),

going to school part time, and being more likely to drop out-about half of those who start at a four-year college don't finish within six years, and debt burden is a major risk factor for persistence.

If they do manage to graduate, it means putting off buying a house or starting a family. It makes saving difficult, so a car repair or an illness lands them in credit card debt. It stops people from taking entrepreneurial risks, going to graduate school, working in low-paid social service professions, or moving to a city with better job opportunities but a higher cost of living.
In short, debt neutralizes many of the positive effects of education.

Yes, college is still a good deal on average for those who graduate, even with the debt. But saddling young people with these obligations is a bad deal for our country as a whole. A phenomenon called debt aversion means low-income and minority students are less comfortable with borrowing.


As our economy faces ever-more challenges from developing superpowers, we will need all hands on deck. We can't afford to lose 2 million college-qualified high school graduates by the end of the decade, as we are on track to, because they can't afford to go on to college.

The good news is that the growth of student loans-and the simultaneous growth of lenders' profits--are finally edging into public consciousness.
Both the Department of Education and the Republican leadership in Congress tried to spin the recent budget reconciliation bill, which cut $12 billion from the student aid program, as achieving its savings by cutting subsidies to banks like Sallie Mae. But local newspapers from Washington State to North Carolina printed the truth: most of the savings taken out of the student loan program come from borrowers. That means higher interest payments and fees for students and parents.

Last September, Secretary of Education Margaret Spellings announced a major, blue-ribbon Commission on the Future of Higher Education. The commission is in a public comments period,


and the student Public Interest Research Groups have begun a nationwide grassroots campaign to get these experts to acknowledge growing student debt as a necessary target of policy change. By April, they want to collect 10,000 comments from students on the impact of their debt. You can see entries from their "Student Debt Yearbook" online at Studentdebtalert.org. "We are the generation of the future," writes Amanda, a graphic design major at
Portland State University who will owe $30,000. "We need to be able to start fresh once we are done with our education so we are able to put something back into our community rather than worrying about paying off our outrageous debt."

Amanda is right. And now is the time to take action. As bad as the
situation is now, if left up to the free market it will get even worse.
Sallie Mae, now a fully privatized giant with its stock prices on fire, controls $11.5 billion of the $15 billion market in private student loans. (Gateway research report)

These loans, unsubsidized by the federal government, carry higher interest rates than federal loans and fewer repayment options. With astonishing 27% annual growth over the past seven years, private student loans are on track to surpass federal loans within a decade. (Gateway Research Report)

The issue of excessive student debt demands a federal solution, in cooperation with colleges, to hold down costs for students. The alternative is to give a monopolistic lending industry with its own narrow profit motives control over our nation's competitiveness and our children's futures.

Your Comments

I thought I'd post some excerpts from emails I've been getting in reaction to the launch of Generation Debt. I am thinking about holding a contest for the Voice column where people write in to tell their own stories of living in Generation Debt and the things they've been doing to get by.
These snippets are posted anonymously, but let me know if you'd like yours taken off the blog.

I owe the government a few thousand in taxes, Sallie Mae 20K, and I just get by paying the rent, and live a modest life as far as luxury goes. Your book has made me realize that since Reagan, and especially in recent years, the government has really changed the laws, interest rates, etc. to favor the rich, and (pardon me), fuck the poor... I got so upset reading Gen Debt (a lot of my fellow grads have plenty of money, and have started families...it makes me feel so f*!!*ked up!). I've chosen to live in NYC to pursue the arts, and to escape the bland life of suburbia (where my family resides in NJ). I thought that the reason I was relatively poor was my fault; but really, I've worked hard, just in professions that don't pay.

As a young person with great trepidation for my future career / financial situation, your book made me realize that I'm not alone in my seemingly counterintuitive youthful pessimism. I thank you for it.

as a young person in nyc who has a good job but still can't afford to buy an apartment, i fit squarely in the demographic you write about... i can't really afford to buy, but i recently made peace with the fact that for young people these days, the only way to make it economically is through major sacrifice. i was trying to not get down about all that while walking around in the rain when i found...you talking about the same problems i was thinking about... just hearing someone speaking to those issues did indeed make my day.

As a student in my last year... your talk is very relevant to my life and I thank you for helping me be aware of the paths I am currently and will have to take in the future.

It has also been my argument that people in US live with the money that they optimistically think they are going to make in the next 20 years, and they spend all of it today. I can't believe that even myself have a fat credit card balance, and even though I make good money, the monster keeps growing. Young people don't deserve that headache, and I thank you so much for fighting for them.

Radio Spots

I had a great hour with Pete Wilson in the Bay Area on Tuesday, February 7.

Likewise with Steve Scher of Seattle's 94.9 on Thursday, February 9 (featuring Tom Joyce, of Sallie Mae.) (You can listen on this link).

Wisconsinites can catch me on "Conversations with Joy Cardin," Monday February 13 from 7 to 8 am. (you can listen on this link too, I think).

Coming up, I'll be on the Kojo Nnamdi show on WAMU in DC next month.

New Haven Advocate Review

Nice to see them assign the book to a young writer, for once.

Kamenetz ends Generation Debt with some stern prescriptions for her readers. Parents need to talk seriously with their children about the costs of education and retirement and place some economic responsibility on their children at an earlier age. Young people need to begin planning their financial future now , by consolidating debt, saving, and working toward a career. We all need to advocate for better working conditions for the contingent laborers that have become a mainstay of the new workforce. And we need to demand that the government provide better financing for higher education. This call to arms is not a self-pitying complaint, but the product, on Kamenetz's part, of an open mind and real courage.

Why Deficits are Not Good

From Slate: "This week, the White House released its 2007 federal budget, which projected a shortfall of $423 billion for the current fiscal year. The good news: Budgeters predict diminishing deficits in years ahead, even while accounting for extending the Bush tax cuts. The bad news: For those forecasts to come true, Iraq will have to turn into Canada next year, Afghanistan into Sweden, and Congress into an order of mendicant monks.

If we deficit hawks have failed to generate enough alarm to motivate action, it may be because our metaphors have gotten stale. Running a deficit isn't so much like shooting yourself in the foot, which hurts immediately. It's more like smoking, drinking to excess, and not exercising. It will in fact kill you—just not tomorrow."

Notes for Seattle Speech

I am in a beautiful Seattle hotel room with a view of the Public Library across the street, getting ready for my speech tomorrow night at Town Hall. Here are some notes for the opening. Comments welcome...

My book is called Generation Debt: Why Now is a Terrible Time to be Young. I didn't actually choose the subtitle of the book; it was meant to be controversial, and sure enough, people have come out swinging right at it from both sides. On the one hand (shaking my finger): Stop whining. It is always a wonderful time to be young. You are healthy, and strong, and you have your health. Get some perspective, for chrissakes!
On the other hand: Stop whining. It is always a terrible time to be young. Why I walked uphill to school both ways five miles in the snow. Get some perspective, for chrissakes!

And both of these criticisms, though they are contradictory, I will concede do have some merit. But when I talk about the first part of the title, why I call my generation Generation Debt, I hope that you will become a little concerned about what is actually different for us now, at this time in history.

First, Generation Debt refers to the student loan debt that we incur on the way through college. This debt is now at a level unheard of in American history, and unique throughout the world. Two thirds of us are borrowing an average of $20,000 in order to get a BA.

Second, Generation Debt refers to the credit card debt that we rack up in the years during and immediately after college. Again, the actual legal possibility of incurring large consumer debts while still young and financially dependent is unique to this American generation, and unique throughout the world. Seven out of 10 25-34 year olds are carrying an average of $4,088 in credit card debt. The sheer ability to owe this much was previously available perhaps only to rakish young princes, with gambling habits.

And finally, Generation Debt refers to the politically uncomfortable subject of federal deficits and unfunded liabilities: an $8 trillion national debt, and a $53 trillion long-term shortfall, by some calculations, in Social Security and Medicare. And this topic is uncomfortable because it has to do with my generation living out the consequences of earlier generations' decisions to borrow an awful lot of money and then um, kinda run out and stick us with the check.

So I'll leave this uncomfortable topic for last, and first let's talk about college.

Thanks to the Project on Student Debt!

Thanks to Bob Shireman and Edie Irons of the Project on Student Debt for a great event at the UC Berkeley School of Journalism last night, and thanks to Analog Books of Berkeley too! In a highlight, Nancy Coolidge, who coordinates financial aid for the whole UC system, spoke about her success in getting 80 percent of Berkeley students to consolidate their loans last spring to lock in low rates, and the importance of spreading the word far and wide before this July 1--this may be your last chance to get a low, fixed rate.

There definitely need to be better channels to get information out about negotiating the financial aid system *before* people take on debt. I am thinking about going around to high schools now as well. Knowledge truly is power.

Seattle Weekly Listing

For the event thursday night at Town Hall.

MN Star-Tribune Column on Gen Debt

Honest, thoughtful:
"Am I really that clueless about finances? Or is reflecting a stereotype just easier than making hard choices about money?"

Rhetoric & Reality

Rhetoric (State of the Union speech, Feb 2, 2006) :
"If we ensure that America's children succeed in life, they will ensure that America succeeds in the world. (Applause.)"


Reality (2007 Fiscal Year President's Budget Request):
President Bush's budget for fiscal year 2007 cuts federal education spending by 3.8 percent, the largest in at least a decade.

CNN, MSNBC Learn that Students Have Debt

I have officially used up 7 of my 15 minutes. You can watch the results, here (The Situation with Tucker Carlson) and here (American Morning).

A New Union in Bushwick

Workers in a small chain of sneaker stores formed a union with the help of community group Make the Road by Walking. They got higher wages, guaranteed hours and paid vacation.

Solution to NYC Rent Crisis?

These guys put out a Craigslist ad for a mattress hung from their ceiling-$35 a month--and several starving 20somethings responded, including one young woman who spent the previous night on the A-train.

We thought about doing the same thing in our apartment, with a hammock on the balcony.

This comic pretty much sums it up.

Sallie Mae's Best Buddy Wins House Majority Leader

This is really a one-two punch for student borrowers. Yesterday, $12 billion in cuts. Today, Sallie Mae's favorite congressman becomes the standard-bearer for the House.

See my quickie Voice commentary on same.

Interview on Gothamist!

The lovely, talented and multifaceted writer Rachel Kramer Bussel interviewed me for Gothamist . As the blog usually does, it's a long, really detailed, meaty piece. Thanks, Rachel!

Thanks, Marymount!

Thanks to the women of Marymount College for a great first book event. Leave a comment if you visit the blog! And if you want to know more about how to get involved, or have any other questions, you can send me a message here too.
Anya

Generation Debt Out Tomorrow!

Listen for me on the radio during drivetime if you live in these places:

7:05-7:15AM – NATIONAL – USA Radio Network “Daybreak with Al & Richard” - live
7:15-7:25AM – Rochester – WHAM-AM/ “The WHAM Morning News with Chet & Beth” (live)
7:40-7:50 AM – Denver – KBCO-FM/ “Morning Show with Brett Saunders” – (live)
7:50-8:00 AM –National – ABC RADIO/ “Jonathan & Mary” (live)
8:15-8:30AM – Atlanta, GA – WIMO-AM “Morning News with Kurt Andrews” – (live)
8:30-8:45AM–Paducah – KYMO AM/FM “Morning Show with Reid Howell - live
8:45-9:00AM – Madison/Lacrosse, WI – WIZM-AM “Mornings with Mike” – (live)
9:00-9:10AM – Raleigh, NC – WRSN-FM “Madison in the Morning” – (live)
9:10-9:20AM – Salt Lake City, UT – KUTR-AM “Waking Up with Rebecca & Kurt” – (live)
10:10-10:20AM – Oklahoma City – KJYO-FM “Morning Show” – (live)

or see me on Lou Dobbs Tonight-CNN sometime between 6:30-7 pm. It should be a great segment.

The Raid on Student Aid--Completed

The night before the book comes out, we have this piece of inspiration:

WASHINGTON, D.C. - By a vote of 216 to 214, the U.S. House of Representatives this afternoon narrowly approved a Republican-backed bill that cuts $39 billion out of critical health, education, and other services for American families, including a $12 billion cut to the federal student aid programs, in order to finance multi-billion-dollar tax breaks for the wealthy. Not a single Democrat voted in favor of the bill.
When coupled with those tax breaks, today's legislation - which Republicans misleadingly claimed was meant to help reduce the budget deficit - will actually increase the deficit.
"Congress has just enacted the largest raid on student aid in history in order to give more money to the wealthy, even while millions of American families are struggling to afford the rising cost of college," said Rep. George Miller, the senior Democrat on the House education committee. Miller led the fight against the cuts to student aid programs.

It's important to note: 13 Republicans crossed the aisle to vote against this bill. The tireless and intrepid student advocates came very very close. Meaning this fight is winnable.

Library Journal Review

Journalist Kamenetz is a 24-year-old Yale graduate who has been nominated for the Pulitzer Prize for her reporting. But her credentials belie the fact that she's actually a freelancer who can't land a full-time job with benefits. That makes her living proof of the book's thesis-that the economic outlook for today's twentysomethings is far different from that of their baby-boomer parents...What keeps Kamenetz's book from devolving into a whiny, angst-ridden rant are the frightening facts about the changing labor market, higher education funding, the federal deficit, and the burden of incurring massive debts to stay afloat in college or launch a career.

Bob Herbert Gets it, As Usual

I only scratch the surface of the racial implications of Generation Debt in the book. But this column (Times Select) pretty much says it all:

We are now in a time when a college education is a virtual prerequisite for achieving or maintaining a middle-class lifestyle. "Only the kids who get a postsecondary education are even keeping even in terms of income in their lives, and so forth," said Gary Orfield, a professor at the Harvard Graduate School of Education and director of the Civil Rights Project. "The rest are falling behind, year by year. Only about a twelfth of the Latino kids and maybe a sixth of the black kids are getting college degrees. The rest of them aren't getting ready for anything that's going to have much of a future in the American economy."

Business Week Review of GenDebt

"The Bottom Line: The bum deal the authors describe is far from fantasy."

While younger readers may see a real crisis, baby boomers will probably view their concerns as nothing more than a phase they should outgrow. I think those boomers would be wrong.

Bush Swears to Uphold Giant Tax Increase...

On the young and future generations, that is.
You see, if the Bush tax cuts are allowed to expire, our budget will be in surplus by 2012. But if they are made permanent, as he has vowed to do, we'll be facing deficits out the wazoo.

The long-term budget forecast is gloomier, particularly if Bush and Congress agree to extend the tax cuts. In 2016, the deficit would be nearly $400 billion. Beyond that, the costs of Medicare, Medicaid and Social Security are projected to rise to a level that “economic growth alone is unlikely to alleviate,” the report says. “A substantial reduction in the growth of spending, and perhaps a sizable increase in taxes as a share of the economy, will be necessary for fiscal stability to be at all likely in the coming decades.”

Obviously, if you're in your 20s, your tax-paying life will mostly take place "in the coming decades."

This story says it all

From the Seattle P-I : Student Loans Eating Up Salaries

Crap Job Propaganda

on the NYT front page right now: "Workers Warm to Contract Jobs" over a big ad: "Starbucks Hiring Event! On the Spot Interviews....

Adult Children till 30

A new New Jersey law says employers must extend family coverage to children of employees until they reach age 30, as long as they are single.

A very real problem that deserves legislative attention; a backwards, infantilizing way to address it.

An Empire built on Lateness

My latest GenDebt column is about Sallie Mae's lending practices. It seems that a lot of people end up owing 2, 3, or 4 times more than they originally borrowed, outlandish amounts that they could never pay off in a million years.
This is a danger that haunts borrowers of all types, but I believe the problem is worse for student loan borrowers, for these reasons:
1) Unlike credit card debtors, students have no choice but to borrow their way through school. It's the acceptable, responsible thing to do.
2) Besides the fees and inflated interest rates that happen if you're a "bad" borrower (making late payments), you can also get in trouble for being a "good" borrower. If you take advantage of deferments so as not to become delinquent, you'll get walloped with even more charges in the end.
3) Because student loans are not dischargeable in bankruptcy, the banks have no incentive to settle. Often, if your credit card debt is "charged-off" (ie, sold to a collection agency) that agency will accept less than the face value, because they acquired your debt for less than face value. With student loans, the banks can turn your debt over to the Department of Education, which can seize your tax returns, your wages, social security, etc etc etc.