The university of financialization – science and math graduates opt to go into the gambling fields of Wall Street banking instead of building productive jobs for society. Many non-tech majors choose lower paying fields while going into massive debt. Youth summer employment drops from 60 to 46 percent in last decade.
Going to college has always been a dream for many Americans. Parents have high hopes for their children going to a good school and coming out with a degree that has made them more well rounded as citizens. But this desire may not be coinciding with the marketing jargon that spews out from the industry. Since the US is now one giant financialization machine, banks have shifted their gambling addiction from real estate to higher education. In the last decade the fastest growing segment of higher education enrollment has come from the for-profit college industry. This is an industry that spends more money on slick marketing and deceptive advertising than it does on actual instruction. Across the board however college tuitions have increased even at quality institutions but many are finding their degree is not providing a solid return on investment.
The great deleveraging event – household debt has fallen 4 percent since recession hit. Household debt has fallen dramatically from the peak when household debt aligned itself with annual GDP.
The debt bubble bursting has jammed the bottom line of American households. Debt and money are synonymous for many households in our current economy. The ability to spend, or buying capacity, is looked at in the same light as savings from many in the financial sector. This is why data recently released shows the balance sheet issues faced by many typical households are more dire than once imagined. Since the recession hit US households have seen their debt fall by 4 percent, an amount of $584 billion. This is good news right? Well yes but the reality of this “good news” is that two-thirds of this debt reduction came from home loan foreclosures and default on other debt. To put it more simply Americans have decreased their debt load simply because they were unable to pay off inflated assets. On the flip side the financial sector has been handed a blank check for the ill-advised lending and predatory bets they made but US households do not have access to the unlimited piggybank at the Federal Reserve.
The catastrophe of our economy for the young American worker. Average college debt higher than typical new automobile cost, annihilation of pensions, and younger Americans moving back home because of financial necessity.
The economy for young Americans might as well be in a parallel universe to the stock market run since early 2009. Talks of recovery must fall on confused ears as many young college graduates compete for fewer jobs with higher amounts of student debt. In the last decade college graduates have encountered the highest tuition increases ever while getting a lower return on their investment once they enter into the workforce. The economy is still a mess if we dig into the data and look outside of the stock market gains. Many of the S&P 500 companies added jobs globally but outsourced many domestic jobs to foreign markets to save money. So profits increase but how does this help the domestic job market? It doesn’t and that is why this recovery is one of low wage capitalism and banking handouts. For the millions of young Americans that are entering the workforce with tens of thousands of dollars in student debt, what can they expect from the current economic structure?
The sordid details of the employment market – Before recession hit 5,000,000 job openings were available while today there are 3,000,000. 1,000,000 Americans have completely quit looking for work and average duration of unemployment is 40 weeks, twice the amount of the 1980s recession.
There is a growing disconnect in America as the middle class is hollowed out. Many Americans hear talks of a recovery that is now going on three years but look at their tight monthly budgets and wonder what recovery is being discussed. The median household income is roughly $50,000 and with rising food, healthcare, energy, and college costs many are left with little each month once the basics are paid for. And that is the core of the issue. The typical American family is seeing their paycheck devoured by items that are used on a daily basis. The employment situation is tenuous at best. We still have a peak in discouraged workers. Roughly 1,000,000 Americans have simply stopped looking for work since the recession hit. These are people willing and able to work but have given up in the current economy. We are adding jobs and many are in the lower paying service sectors. What is meant by a recovery?
EBT Nation – Electronic Benefit Transfer. Since the recession ended in summer of 2009 we have added 14,000,000+ Americans to food stamp programs. Family Dollar Stores up 23 percent in 2011 while overall stock market flat.
They say a nation is not measured on how it treats its wealthiest, but on how it treats those that are struggling. From this base the mission of the United States is becoming muddied by the large scale financial speculation that has fractured the core of our economic system. Everywhere you look you are starting to see signs posted of “EBT accepted here” meaning those with food assistance can use their debit cards in the stated location. Food stamps now labeled “SNAP” are typically the last rung on the economic ladder for millions of Americans. With the latest round of information we see that we are in record territory for those receiving food assistance. Over 46,220,000 Americans are receiving this assistance. How is it that we officially exited the recession in the summer of 2009 yet continue to expand the number of Americans on food stamps?
Las Vegas real estate and the dynamics of a lower priced housing market – With median home prices around $100,000 they now reflect the reality of a lower paying service sector economy. Foreclosures and short-sales make up over 70 percent of all sales activity.
Las Vegas is a case study in the limits of the housing bubble but also the reflection of a new economy driven by a demand for lower price real estate. Wedged in the story of a collapsing real estate market is a new reality that many families are craving lower priced properties. Few places in this country benefited so much from the rising price of real estate like Las Vegas. When things turned dramatically the market was left relying heavily on two industries, gaming and real estate, that profoundly relied on a booming economy but also on unlimited access to debt. Las Vegas has the highest percentage of its homes in foreclosure and has also seen some of the steepest price falls from any large metro area in the country. It is fascinating to see that roughly half of all purchases over the last few years have come from investors. The trend seems to reflect a demand for low priced housing either for investing or for those living in the area to purchase a place with a much lower household income because of the recession. What does this mean for the future of the city?
Is college worth the money and debt? The cost of college has increased by 11x since 1980 while inflation overall has increased by 3x. Diluting education with for-profits. and saddling millions with debt.
Is a college degree worth it? Since the debt bubble burst spectacularly in 2007 many more prospective students are questioning the worth of a college degree. For so many decades it was simply taken at face value that getting a college degree, any college degree would be worth it. Slowly this perception has morphed when annual tuition is running at $20,000 or more at for-profit institutions and $50,000 for private institutions. More to the point, most of the recent educational growth has been financed with large wallet crushing student loans. This financing of the college dream is turning out story after gut-wrenching story of college education nightmares. When a college education becomes this expensive it is important that potential students become savvy consumers. The financial sector certainly isn’t going to offer any advice on navigating the minefield of higher education since they largely have their greedy hands on this sector of the economy as well.
Welcome to the new model of retirement. No retirement. In 1983 over 60 percent of American workers had some kind of defined-benefit plan. Today less than 20 percent have access to a plan and the majority of retired Americans largely rely on Social Security as their de facto retirement plan.
As many Americans enter into retirement they are realizing one unfortunate thing. The new retirement plan is no retirement at all. Over the last few decades Americans were promised the idea of a comfortable retirement yet none of this has materialized because of financial swindling and a real estate bubble that will go down in the record books. On the flip side, many Americans went into massive debt and consumed their future nest egg today with big purchases outside of their budgets. So what are we left with today? We are left with over 75,000,000 baby boomers entering into retirement with very little saved. One out of three Americans has absolutely no money saved to their name. In 1983 over 60 percent of working Americans had some sort of defined-benefit pension plan. Today that number is below 20 percent. With the average worker making $25,000 a year the media designed idea of retirement is largely just another fantasy.
Kabuki financial theatre – Congress net worth up 15 percent from 2004 to 2010 while the average American sees their net worth decline by 8 percent in the same timeframe. Welcome to plutocrat USA.
We truly have the best government money can buy. From 2004 to 2010 members of Congress increased their median net worth by 15 percent while the average American saw it fall by 8 percent. Yet this fall in net worth does little justice to the rising cost of food, energy, healthcare, and college expenses that have eaten away any iota of progress families try to achieve in a prosperous nation. The fact that Congress presided over a Wall Street pilfering of the middle class and income inequality never seen in the history of the United States, we are starting to get a full understanding of what it is to live in a full-fledged plutocracy. The reason people are frustrated with government is that it no longer looks out for their own interests and is narrowly focused on promoting the aggregation of wealth into fewer and fewer hands.
The calm before the student loan bubble bursts – For-profits make up 9 percent of student enrollment yet produce 27 percent of all private loans. The inevitable pop of the student loan bubble.
The worth of a college degree has now come into question because of the massive student loan bubble. An education is vital yet the monopoly on knowledge has been turned upside down with readily accessible information through technological changes. What is odd however is during a time of knowledge access ubiquity you have a field sprouting up of institutions that simply target the unknowing with promises of degrees that yield worthless marketable prospects. Many for-profit colleges fit in perfectly with the financialization of our nation. The main goal is to draw in a large unsuspecting audience and saddling millions with unsustainable amounts of debt for a piece of paper that has little worth in regards to career aspirations. Like the subprime mortgages pushed by lower levels of the financial industry only for quick profits, many of the for-profit colleges have done very similar things to the prestige of a college diploma. When a list of cats and dogs with college degrees is listed on Wikipedia we know there are serious issues in how some for-profits operate.
