Student Loans are Redistribution
What if the government demanded that middle class parents of kids who want to be scientists, mathematicians, engineers, or work in technology or medicine must pay many tens of thousands of dollars or tell their kids to be plumbers? What if the government demanded that kids mortgage their future if their parents can’t pay up? How long would it take for people to bust out the torches and pitchforks?
That’s why, instead of simply having punitive taxation of middle class families and children to pay for government-standard education, we have this industry of semi-private student loans and colleges. The magic of the semi-free market means that people feel a trunk, an ear, or a tail, and their anger is channeled into harmlessly arguing vehemently about what it is that they feel.
Griggs v. Duke Power Co
Equality of opportunity was the stated intention, but not the meaning, of the 1954 Brown v. Board of Education decision. By 1971, America was ready for mandatory equality of outcomes, the intention and the meaning of Griggs v. Duke Power Co (conservatives who say they like equality of opportunity not equality of outcomes may be saying something fair and true, but they had already lost a decade before I was born). No test, of intelligence, or knowledge, or anything else, having a disparate impact on a protected class would be permitted, not even for teams of men who walk into burning buildings.
But there was a loophole. Academic credentials could be demanded.
So any business that wants minimally intelligent workers needs to require a college degree. Which, purely by accident, means that all future intelligent workers must go get that degree, which means being lectured to in their formative years by – who? – purely by accident, leftists. Who argue that college isn’t about employment, you Neanderthal, it’s about becoming a well-rounded person, which means, purely by accident, taking lots of classes from leftists.
Meanwhile, in the ’90s, the global world means that Americans need to work smarter, not harder, to stay competitive. The way to compete with legal and illegal Mexicans is to get degrees.
So what’s a student loan?
It’s one of many structural weaknesses of democracy that voters like bubbles and bailouts. Unlike the housing bubble, however, bailouts are built in to the student loan and college bubble.
- Banks are literally given piles of money and told to waste as much of it as they want on student loans.
- Peter is “given some financial aid”, but needs to “take out lots of loans” as well. Which he will never pay back with his libel arts degree, but, the banks have those loans guaranteed by the government anyway.
- Paul’s parents have enough income not to qualify for “financial aid”. They pay many tens of thousands of dollars.
- Liberal U gets many tens of thousands of dollars from the government, partly through the bank, and many more tens of thousands of dollars from Paul’s parents. This money is spent on student unions with unisex bathrooms, diversity consultants, and scholarships for underrepresented minorities.
- Peter’s brother Andrew also had to “take out loans”. He takes his Bachelor of Science degree to an engineering firm, and “pays back” every penny before he can buy a house and have kids.
Outside of bizarro world, financial aid is known as price discrimination, but I don’t know of a name for government-backed loans that are in many cases guaranteed to be defaulted on, but can’t actually be discharged in bankruptcy, other than to call it a massive, Kafka-esque, Rube Goldberg subsidy.
“What about poor Peter? He just did what his friends did at the tender age of 18, QQ”, say the liberals.
“Mua-ha-ha-ha, he should have made better life decisions, like Andrew did”, say the conservatives.
So, as always, the conservatives lose, because it really isn’t fair to Peter (or to Andrew, or to Paul’s parents). And what is this system in reality?
Massive redistribution of taxes that specifically target the middle class and young professionals. With lots skimmed off by the bankers, who earn it as a laundering fee.
So now what?
The solution I would favor is for the student loan and college industry to die in nuclear fire.
Failing that, we could at least make it official – this is Moldbug’s solution, or rather, Mencius’s solution. It would predictably have the effect of pushing the taxes away from the middle class and sparking a national debate about just how much schooling we really need.
Once again, we see that our government is carefully designed to extract the maximum possible from the middle class and Whites, and give the maximum possible to people and things progressives like. No, really. The lies are there for a reason, and progressives will in moments of candor admit it and claim to be managing a capitalist economy for the greatest social good.
And really, the only difference I have with them is that I see social good differently.