Why Libertarians Are Basically Cult Members

Economy  

Salon / By Michael Lind

Why Libertarians Are Basically Cult Members

 

Simply note libertarianism's fatal flaw and you'll get an enraged, hysterical response. They still don't get it

 

 

 

June 11, 2013  |  

 

 

My previous Salon essay, in which I asked why there are not any libertarian countries, if libertarianism is a sound political philosophy, has infuriated members of the tiny but noisy libertarian sect, as criticisms of cults by outsiders usually do. The weak logic and bad scholarship that suffuse libertarian responses to my article tend to reinforce me in my view that, if they were not paid so well to churn out anti-government propaganda by plutocrats like the Koch brothers and various self-interested corporations, libertarians would play no greater role in public debate than do the followers of Lyndon LaRouche or L. Ron Hubbard.

An unscientific survey of the blogosphere turns up a number of libertarians claiming in response to my essay that, because libertarianism is anti-statist, to ask for an example of a real-world libertarian state shows a failure to understand libertarianism. But if the libertarian ideal is a stateless society, then libertarianism is merely a different name for utopian anarchism and deserves to be similarly ignored.

Another response to my essay has been to claim that a libertarian country really did exist once in the real world, in the form of the United States between Reconstruction and the New Deal. Robert Tracinski writes that I am “astonishingly ignorant of history” for failing to note that the “libertarian utopia, or the closest we’ve come to it, is America itself, up to about 100 years ago. It was a country with no income tax and no central bank. (It was on the gold standard, for crying out loud. You can’t get more libertarian than that.) It had few economic regulations and was still in the Lochner era, when such regulations were routinely struck down by the Supreme Court. There was no federal welfare state, no Social Security, no Medicare.”

It is Tracinski who is astonishingly ignorant of history. To begin with, the majority of the countries that adopted the “libertarian” gold standard were authoritarian monarchies or military dictatorships. With the exception of Imperial Britain, an authoritarian government outside of the home islands, where most Britons were denied the vote for most of this period, most of the independent countries of the pre-World War I gold standard epoch, including the U.S., Germany, France, Russia and many Latin American republics, rejected free trade in favor of varying degrees of economic protectionism.

For its part, the U.S. between Lincoln and FDR was hardly laissez-faire. Ever since colonial times, states had engaged in public poor relief and sometimes created public hospitals and asylums. Tracinski to the contrary, there were also two massive federal welfare programs before the New Deal: the Homestead Act, a colossal redistribution of government land to farmers, and generous pension benefits for Union veterans of the Civil War and their families.  Much earlier, the 1798 act that taxed sailors to fund a small system of government-run sailors’ hospitals was supported by Thomas Jefferson and Alexander Hamilton alike.
State and local licensing rules and trade laws governed economic life in detail, down to the size of spigots in wine casks, in some cases.

It was precisely these state and local regulations that the Supreme Court struck down, in Lochner v. New York (1905) and other cases, to promote the goal of creating a single national market. At the same time, sharing their racism with most white Americans, federal judges in Tracinski’s “libertarian” America permitted the most massive system of labor market distortion of all: racial segregation, which artificially boosted the incomes and property values of whites.

 

The single national market that Lochner-era courts sought to protect from being Balkanized by state and local regulations (other than racial segregation) was walled off by the highest protective tariffs of any major industrial nation. The U.S. government between Lincoln and FDR engaged in a version of modern East Asian-style mercantilism, protecting American industrial corporations from import competition, while showering subsidies including land grants on railroad companies and using federal troops to crush protesting workers.  This government-business mercantilism was anti-worker but it was hardly libertarian.
High tariffs to protect American companies in Tracinski’s alleged Golden Age of American libertarianism were joined by racist immigration restrictions that further boosted the incomes of white workers already boosted by de jure or de facto racial segregation. The 1790 Naturalization Act barred immigrants from becoming citizens unless they were “free white persons” and had to be amended by the 1870 Naturalization Act to bestow citizenship on former slaves of “African nativity” and “African descent.” Although the Supreme Court in 1898 ruled that the children of Asians born in the U.S. were citizens by birth, Tracinski’s libertarian utopia was characterized by increasingly restrictive immigration laws which curtailed first Asian immigration and then, after World War I, most European immigration.

Calvin Coolidge, the subject of a hero-worshiping new biography by the libertarian conservative Amity Shlaes, defended both high tariffs and restrictive immigration. Here is an excerpt from President Coolidge’s second annual address in 1924:

Two very important policies have been adopted by this country which, while extending their benefits also in other directions, have been of the utmost importance to the wage earners. One of these is the protective tariff, which enables our people to live according to a better standard and receive a better rate of compensation than any people, any time, anywhere on earth, ever enjoyed. This saves the American market for the products of the American workmen. The other is a policy of more recent origin and seeks to shield our wage earners from the disastrous competition of a great influx of foreign peoples. This has been done by the restrictive immigration law. This saves the American job for the American workmen.

In 1921 then vice-president Coolidge wrote an article entitled “Whose Country is This?” inGood Housekeeping, in which he declared:

“Biological laws tell us that certain divergent people will not mix or blend. The Nordics propagate themselves successfully. With other races, the outcome shows deterioration on both sides.” (Amity Shlaes’s hero evidently believed racist pseudoscience about dangerous and inferior “half-breeds”).

Protectionist, nativist paleoconservatives of the Patrick Buchanan school might have reason to idealize the U.S. as it existed between 1865 and 1932. But libertarians who want to prove that a country based on libertarian ideology can exist in the real world cannot point to the United States at any period in its history from the Founding to the present.

Long-Term Jobless: Still a Bleak Picture

Business Day

The Jobs Report June 7, 2013, 2:18 pm

Long-Term Jobless: Still a Bleak Picture

By ANNIE LOWREY

 

 

Long-term unemployment remains a very dark shadow in the May jobs report: 4.4 million workers have been out of a job for more than six months. In essence, the job market has normalized for the short-term unemployed. But the longer you have been out of a job, the bleaker the picture gets.

The number of people who report being out of work for less than five weeks has returned to almost the same level as in 2007. But the number of people unemployed 5 to 14 weeks is about 25 percent higher. For those out of a job 15 to 26 weeks, it is 78 percent higher. And the number of long-term jobless, those unemployed for more than 27 weeks, is a whopping 257 percent higher.

The long-term unemployed are struggling mightily to get rehired, as confirmed by recent research by Rand Ghayad and William Dickens of the Federal Reserve Bank of Boston. Some economists have theorized that the unusually long spells of unemployment we have seen in the wake of the recession are caused by a “mismatch”: The long-term jobless were in obsolete professions, with obsolete skills, and that is why they are not getting new gigs.

But Mr. Ghayad and Mr. Dickens argue that is not the case. The long-term jobless seem to be having trouble finding work across industries, for instance. Discrimination does seem to be a major factor, though: Employers simply do not want to hire the long-term jobless, as my colleague Catherine Rampell has reported and further research by Mr. Ghayad has shown.

Granted, the number of long-term jobless has come down sharply over the last three years, declining to a current level of 4.4 million from a high of 6.7 million in early 2010. Much of that reduction came about because the long-term jobless found jobs — it is not just about workers dropping out of the labor force. Still, the reality remains that the longer a worker is out of a job, the slimmer and slimmer the chance of being rehired.

The 4 Plagues: Getting a Handle on the Coming Economic Apocalypse

Economy  

AlterNet / By Don Hazen

 

 

The 4 Plagues: Getting a Handle on the Coming Apocalypse

 

In an environment of confusion and despair, it helps to understand the forces at play, how they operate, and why they feel so overwhelming. 

 

 

 

Photo Credit: f9photos/ Shutterstock.com

 

 

 

 

June 4, 2013  |  

 

 

Every day, thousands, probably millions of people ask their family, friends, neighbors and colleagues similar and increasingly familiar questions: What has happened to our country? How did we get here? Isn’t it scary? Can anything be done about it?

There is an abundance of evidence that there are forces tearing apart the U.S. economy and society, causing increasing levels of fear, anxiety and trauma for large numbers of people. Many people are mystified as to the specific causes of their fears, with a mass media system that constantly broadcasts propaganda about how great America is and a new digital media system that may be exacerbating the problems for a society under immense and unprecedented duress.

There is the added problem that the theories and the means of social change we are familiar with, and to which we still turn, are not remotely up to the task we face, and have mostly proven to be inadequate. Virtually every problem we face has gotten worse over the past 40 years, and heavily sped up since 9/11 and the economic crash of 2007.

In an environment of confusion and despair, it can be helpful to name the beast—essentially to understand the forces at play, how they operate, and why they feel both intractable and overwhelming. So, what follows is a kind of Users' Guide To What Is Freaking Us Out.”

What Has Happened to Us?

So the big question is: what is the “it” that has happened to us? Depending on your vantage point and the myriad problems in front of us, “it” can be any number of causes and factors.

For many, it is the disappearance of the sense of a democracy many thought was embedded in U.S society. Sure, we’ve always been ruled by elites. But we are in a new era where we feel crushed by the overwhelming dominance of corporations and big institutions that treat people like commodities, getting away with degrading people’s dignities while pocketing large profits. This is especially true of banks, which are now so big they are beyond the reach of the legal system for fear that the global economy will be adversely affected.

Many people feel they have no control over the direction of the country because their vote doesn’t matter—incumbents with the most money mostly get elected. Many voters feel trapped by the lack of options because of pro-corporate stances of both Republicans and Democrats, and then there is another beast—the rabid right-wing.Our legislators are bought by campaign contributions and seem incapable of constructive action. Meanwhile, the Supreme Court decision in Citizens United, and the fact that legally corporations are often treated like persons, is beyond most people’s comprehension.

Economic Disaster For Many

For others, the anxiety producing “it” is directly connected to personal economic loss, of homes, jobs, personal wealth, or increased debt, all which has contributed to a massive erosion of financial security.

The statistics are quite shocking. The poor are suffering—more than 46 million Americans live at or below the poverty level, which is $23,201 for a family of four. That's $5,800 per person; but a far larger group of 138 million people (nearly 40% of American households)—many of whom had considered themselves part of the middle class—are living paycheck to paycheck. And, according to a Pew Foundation survey, “nearly a quarter of Americans (24%) say they had trouble putting food on the table in the past 12 month revealing a painful level of deprivation and family trauma despite the U.S.  being the richest country in the world. Our level of deprivation is closer to that in Indonesia or Greece rather than Britain or Canada.”

Especially for Those About to Retire … Or Thought They Were

Furthermore, financial security for the future, often referred as the “American Dream,” is increasingly out of reach for many millions.  This is especially true for those approaching retirement—a goal that has been undermined, even destroyed, by the economic crash of 2007, which robbed so many of what small wealth they had. Over the long run, a major culprit has been the replacement of pensions by the grossly inadequate 401K model, which is forcing millions of Americans to keep on working, or find marginal jobs to help pay the bills as they age, or in some cases fall into poverty, living only on a meager Social Security stipend.

As Joshua Holland recently noted, this trend “has been an integral part of what Yale political scientist Jacob Hacker called the great risk-shift, in which the burden of paying for education, healthcare and retirement has increasingly shifted from corporations and the government onto the backs of individuals and families."

Teresa Ghilarducci, a professor of economics at the New School for Social Research writes, “The specter of downward mobility in retirement is a looming reality for both middle- and higher-income workers. Almost half of middle-class workers, 49 percent, will be poor or near poor in retirement, living on a food budget of about $5 a day.” She adds, “Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts.”

But the situation is far from great for recent college graduates, many of whom are being crushed under student loan debt, while facing a competitive and often exploitative job market, where all too often an unpaid internship is an essential way to advance in a career. This is the first generation since the Great Depression that will make less money and have fewer resources than their parents. Perhaps because of dealing with all the stress, this generation has a prescription pill epidemic on their hands, which may be leading to a significant increase in suicides in their demographic.

Take Your Pick

This first summary just touches on some of the economic problems. The list of concerns and anxieties goes on and on—here are some of the most prominent, but any reader will be able to add her own to the list:

• The lack of an adequate response to the looming climate crisis.
• Mass incarceration, in which 2.3 million Americans, a huge number of them African American and Latino, are behind bars.
• The huge and still expanding security state, as police forces militarize, even in small cities and towns.
• A high level of unemployment at 7.5 %, considerably beyond what historically has been acceptable. And as Andrew Ross points out in the San Francisco Chronicle, “12.2 million Americans are classified as ‘not in the labor force’ because they're considered ‘discouraged.” When you add in the discouraged and the reluctant part-timers (7.2 million people) the unemployment rate jumps first to 9%, then to 13.9%.
• The continued prevalence of violence against women, often fueled by alcohol, and by the culture of rape in the U.S. military.
• The war on poor students as testing dominates the move toward privatizing public elementary and secondary education via charter schools; and in public schools, kids are increasingly treated as criminals.
• The assault on journalists, civil liberties and whistleblowers by a Democratic president, who campaigned quite differently than he is governing.
• The return of many wounded and psychological damaged soldiers from our two wars, where hundreds of thousands of soldiers are suffering from PTSD, and often lacking in supportive services to help them cope.
• The still-unchallenged power of the NRA, as many states are passing more lax gun laws, or making sure there are no gun control laws at all, despite the popular will, and the overwhelming data documenting the number of people killed by guns.

The list of disasters adds up to a very dark picture; the future looks bleak for tens of millions of people, a fact that has produced an epidemic of fear and anxiety. And finding our way out is a huge challenge, in part because the safety net keeps getting shredded, and the guidebooks we have used to challenge oppressive power are not capable of leading the way.

Many critics have been content to attribute the current state of affairs to a particularly virulent brand of casino capitalism practiced in the U.S. and gaining dominance globally. Sure, this is true. But it is not sufficient to simply chalk up our predicament to capitalism, because there are many forms of the capitalist economic system that don’t produce the dire results we have here in the U.S.
The problem is the special brand of American capitalism, with its thousands of interlocking parts feeding on each other, that ends up controlling and exploiting a majority of Americans. It is important to deconstruct how this happens in a digestible way.

The Symptoms Are All Around Us

A strong case can be made that collectively we are traumatized as a society, though perhaps reluctant to admit it. A constant barrage of stress, anxiety, intrusion, incarceration, and a generalized drumbeat of fear from the media and we have the mess we are in. Increasingly, despair leads to addiction, violence and even suicide, especially for people hardest hit by job loss.

Newly released and striking figures from the Centers for Disease Control and Prevention reveal that from 1999 to 2010 the suicide rate among Americans ages 35 to 64 rose by nearly 30 percent, up from 13.7 to 17.6 deaths per 100,000 people. In 2010 more people in the U.S. died from suicide than from car crashes—a statistic that alone seems to stand as troubling testament to desperate times. As the New York Times notes, the CDC and other experts believe the suicide figures to be on the low side.

Another striking symptom is high levels of stress that lead to drug use, abuse and addiction. Research concludes that stress can render people susceptible to serious illness, and that chronic stress can play a role in the progression of cancer. It is hard to believe, but 11 percent of all Americans aged 12 and older, which is well over 30 million people, are currently taking antidepressants despite the danger of suicide for some users.

And a stunning 23 percent of women in their 40s and 50s are now taking antidepressants according to a major study by the CDC.

And that is before you consider alcohol abuse and the fact that the majority of violence toward women is fueled by alcohol.

 A Useful Blueprint

Given the malaise that many are grappling with, the increasing feelings of desperation can feel confusing, overwhelming and crazy-making. Where do we start? How do we understand what is happening so that what we learn can help us take action and improve our outlook? What steps can we take to protect ourselves, to shift the momentum?

A first step is to try to get clear about the nature of how all these forces are coming together to make us so stressed out, and perhaps collectively on the verge of a nervous breakdown. As AlterNet’s executive editor, I have personally been engaged for many years in all the issues and developments described above, publishing much of the best writing on every topic. I too have felt overwhelmed by the tsunami crashing over us. After all the years publishing many thousands of articles, what is happening today feels fundamentally unprecedented—the combination of spiritual malaise and social collapse, an abundance of cruelty and callousness.

Recently I found a way of better understanding the forces that are at play, which I want to share in case it can be helpful. Basically, in this analysis there are four especially powerful and pernicious overarching economic and political mechanisms operating. These are privatization, financialization, militarization, and criminalization, which together are producing a steadily creeping authoritarianism—a new authoritarianism—to fit our times. Let’s call them the Four Plagues, or if we wish, “The Four Horsemen of Our Apocalypse,” from the Book of Revelations in the New Testament.

Actually, according to most accounts, the four riders are seen as symbolizing Conquest, War, Famine, and Death, respectively. So, they’re not exactly analogous, but you get the idea: it’s about very bad stuff that is coming.

The four “plagues” are very potent. With financializationwe are confronting a new hyper form of capitalism, underway for years, but especially apparent with the crash of 2007. Author David Graeber describes the financialization of capitalism in an interview with the SF Bay Guardian as “… casino capitalism, speculation… they are making money out of thin air. … It is based on getting everyone in debt.”

Graeber adds that the profits of Wall Street are increasingly based on finance, not commerce, which means “…they go into your bank account and take your money.” Extracted by the finance sector are mortgages, credit card debt, loan debt, all the fees and penalties you are not noticing. Graeber estimates the finance sector is at or near 20 percent of the economy.  

Privatization is pervasive in our culture, tearing the moorings away from democratic ideals and the commons—the common ground that has held many communities together for centuries. Schools, highways, parks, many things we hold dear are being taken away from public stewardship. Perhaps the privatization of water, where the huge multinational Nestle is leading the way globally, is the most daunting. In his thorough analysis of Nestle, the world’s largest food company and the most profitable corporation in the world according to the Global Fortune 500, Andrew Gavin Marshall writes that Nestle’s chairman, Peter Brabeck, believes that nature is not “good,” that there is nothing to worry about with GMO foods, that profits matter above all else, that people should work more, and that human beings do not have a right to water.

The signs of militarization are increasingly visible in the nation’s police forces, especially with drug raids, as well as the escalated capture of undocumented immigrants by Immigration and Customs Enforcement (ICE) to the point where far more immigrants have been deported during the Obama administration than during George W. Bush’s tenure. There is also now a massive private prison operation mainly to handle those immigrants arrested.

The U.S. is still by far the world’s largest arms dealer, and we have military bases in 63 countries, and all across the U.S. as well, with nearly 1,140,000 soldiers in uniform.

The militarization of America was on graphic display in the over-reactions in response to the Boston bombing. The entire city of Boston was shut down and a kind of martial law declared as millions were told to stay indoors and lock up. Public events were canceled, transportation in and out of the city ceased, people were stranded at the airport—and all because a wide array of police forces were searching for a wounded 19-year-old on foot. The horrible bombing with its horrendous death and destruction traumatized many. But it is likely that the overwhelming police response—local police, ATF, FBI, DEA, etc.—traumatized the population even more. The military model of “lockdown” has become the default response to many disturbances. The use of SWAT teams all over the U.S. has increased dramatically, as the military has supplied local police forces with a wide array of super-powerful weaponry, often far beyond what is needed.

Cornell West Speaks

In a recent dialogue with Institute of New Economic Thinking’s (INET) Rob Johnson at Columbia Theological Seminary, Cornell West used the first three of what I am now calling “plagues” as examples of what is scaring him as he sees our society heading toward fascism. I thank him for his help in advancing my thinking.

I was struck by what West said, but I realized that it is necessary to add criminalization as a fourth plague for a fuller picture. In our world of mass incarceration, we see students, poor people, the homeless, debtors, drug users, and whole neighborhoods being criminalized in huge numbers. One powerful example is in the efforts by the New York Police Department known as “stop-and-frisk.” Since Michael Bloomberg became mayor of New York City in 2002, stop-and-frisk increased by 600%, from 100,000 New Yorkers targeted to almost 685,000 in 2011. Nearly 90% of those stopped are black or Latino.

Mass Incarceration and the New Jim Crow

More than 2 million people in jail has resulted in what author and lawyer Michelle Alexander has called the “New Jim Crow,” in her book of the same name. Despite the civil rights movement, theoretical progress on racism, and even an African-American president, more people of color are in jail than were ever slaves; more people are jailed in the U.S. than in any other place in the world. As Alexander writes: “Rather than rely on race, we use our criminal justice system to label people of color ‘criminals’ and then engage in all the practices we supposedly left behind.”

According to the NAACP, from 1980 to 2008, the number of people incarcerated in America quadrupled, from roughly 500,000 to 2.3 million people. Today, the US is 5% of the world population and has 25% of the world’s prisoners.
Millions in jail is part of a strategy of mass incarceration fueled by the highly funded and militarized war on drug users, which is primarily aimed at the poor and people of color. The racist caste of the criminal justice system is overwhelming: African Americans, incarcerated at nearly six times the rate of whites, now constitute nearly one million of the total 2.3 million incarcerated population. Mass incarceration accomplished in the 21st century what slavery accomplished more than 150 years ago: the oppression and disenfranchisement of a whole generation of black men.

So, looking through the lens of these four plagues provides me with a useful handle on what is happening to our country, and to the globe. They help explain trends and shifts that are destroying the middle class, exacerbating poverty, keeping millions in jail, and traumatizing many millions more. Most of it can be attributed to one or more of the plagues, and often all four.

Essential Ingredients for the Success of the Plagues

But I don’t want to stop here. To best understand the plagues, there are several cross-cutting fundamentals of U.S. capitalism which fuel the oppressive nature of the plagues and help us understand how they interact.

1. Follow the money: For every unfair, exploitative and destructive force going on in America—and there are so many—some corporations or groups of people are profiting. Not only are they making a lot of money, they have also very likely built a powerful infrastructure to ensure the security of their cash flow using a potent array of tools to protect their interests. These are lobbyists, PR agents, campaign contributions, trade associations to agitate for their interests, and with overarching powerful giant entities like the chamber of commerce to provide the protective umbrella.

2. When following the money, it is often the case that the system picks on the weakest. Long ago, someone figured out that the easiest way to make a lot of money is to paradoxically target those who don’t have much.Or use powerless people as scapegoats to leverage access to large pots of money. One example is state lotteries, about which AlterNet’s Steve Rosenfeld explains: “What many people don’t know about lotteries is that they prey on those who can least afford it.” State lotteries amount to a hidden tax on the poor. They eat up about 9 percent of take-home incomes from households making less than $13,000 a year. They siphon $50 billion a year away from local businesses—besides stores where they’re sold.

Another example is that the privatization of the public school system is on the backs of poor kids, with the discredited fantasy that schools will be improved when people make money off of them. "Rent to own,” “payday loans” and many other tactics of capitalism all exploit poor people.
3. The best way to maximize profits and make radical changes in policies is to take advantage of crises.

We all know what happened after the horrible death and destruction of 9/11. Our government, the Bush administration, orchestrated the most gigantic overreaction in history, turning a criminal case to the ongoing “war on terror,” which has transformed most of our lives in many negative ways.
The aftermath of 9/11, which includes the war in Afghanistan and the invasion of Iraq, also created the most extraordinary secret government in the history of humankind. The Washington Post, in an unprecedented investigation that took two years, discovered a Top Secret America hidden from public view and lacking in oversight. “After nine years of unprecedented spending and growth, the result is a system incredibly massive --1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States. An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.”

Naomi Klein, in her book The Shock Doctrine has helped us understand that when crises erupt, those in power will use the opportunity to increase power in extreme and undemocratic ways, in what is now called “Disaster Capitalism.” For example, as Kristen Rawls reports, after the massive impact of Hurricane Katrina, most of the schools in New Orleans’ Parish were replaced by charter schools.

What to Do—The Challenges Ahead

How do we fight these massive interlocking forces that often seem impossible to slow down, let alone stop and change? Well, there is good news and bad news.
The first answer is, we don’t stop the machine, at least now, because we can’t, not at this moment in history, anyway. At the present, there is no large-scale, coordinated, funded plan, across issue lines to organize a mass movement capable of putting a dent in the juggernaut; and there are some major problems on the social change organizing front to be sure.

The Occupy movement was a great moment, and a popular response to financialization and militarization. But then we saw the surveillance state in action as police power along with the titans of big finance crushed the dissent. Certainly Occupy generated, at least for a time, a new level of discourse on economic fairness and exploitation. But it is already a memory, and the system of the “four plagues” grinds on as the wealth gap increases every week.
On the other hand, no one could have predicted Occupy. Is there another upheaval waiting to explode?

Nevertheless, there is a lot of good news on the activism front. As Kevin Zeese and Margaret Flowers write, “Every week we are inspired by the many people throughout the country who are doing excellent work to challenge the power structure and put forward a new path for the country. The popular resistance to plutocracy, concentrated wealth and corporatism is decentralized, creative and growing.”

A couple of examples, according to Zeese and Flowers, include a growing series of protests called “the ‘Moral Monday’ demonstrations in North Carolina ....challenging the systemic corruption, undermining of democracy and misdirection of a state government that puts human needs second to corporate profits—which they have dubbed ‘Robin Hood in Reverse.’"

There was a recent victory for Seattle teachers and students that resulted from their citywide protests against standardized testing. The school district announced that testing in the high schools would not occur next year. The teachers said they will keep protesting until the tests are banned from lower grades as well.”

There are dozens of examples like this. Hopefully momentum will build, although the obstacles are formidable and the forces of repression ready to step in at any moment.

Still, being realistic, the challenges of building resistance, finding ways to reform and change the "system” is hugely daunting. Many thinkers argue that our version of exploitative capitalism is doomed, and will someday fall apart. The only problem is, those thinkers have no idea how to bring down capitalism, or even change the system, beyond critiquing it. The number of people and books that bewail the system are many, but the path to solutions, almost nil. Meanwhile, more people suffer every day.

I am personally frustrated, that some of our biggest thinkers and experts are not investing much of their brain power or political capital in the bigger picture of strategy and tactics—the battles to gaining more political clout to confront the power centers. The ability to build to a point where millions of people are in the streets is currently not on the horizon. So there is much work to be done in that regard. An assessment of the possibilities to change, and a range of the options is beyond the scope of this article, but will be forthcoming.

Don Hazen is the executive editor of AlterNet.

The Jobless cult of Apple is starting to disintegrate.

Economy  

AlterNet / By Lynn Stuart Parramore

6 Reasons Your Apple Product Has Become Very Uncool

 

The cult of Apple is starting to disintegrate.

 

 

 

Photo Credit: Shutterstock.com

 

 

 

June 3, 2013  |   

 

 

 

It’s hard to identify the moment when a company once beloved by trendsetters becomes uncool. Sometimes the firm gets too big for its britches and starts pissing off its customers. Others times the hipsters who first embraced the products grow too long in the tooth to seem cool anymore. Lots of times innovation starts to lag as a firm shifts its focus from making cool stuff to shoveling money toward executives.

Apple’s cool factor seems to be suffering for all of these reasons and then some. So what, you say. It’s just a vibe. They still have gobs of money. Well, the problem for Apple is that its marketability has been built on the cool factor, and once you lose it, it’s not easy to get it back. Here are six unmistakable signs that Apple is on the downward slide.

1. Apple is boring. 

That’s not what you want to hear when you’re trying to be the cool company. And yet USA Today reports that college students are feeling unbedazzled by Apple CEO Tim Cook’s promises of amazing new gadgets at a recent conference. “Some college students are losing their enthusiasm for Apple after recent product upgrades have been underwhelming,” notes collegiate correspondent Mark Lieberman. Among the student complaints were overpricing, lack of ability to customize Apple products, and various technical challenges.

Other Apple-watchers have voiced similar beefs, pointing out that for all the iPhones, iPads and MacBooks, the whole just adds up to a big yawn. Ashraff Eassa at the Seeking Alpha blog doesn’t mince any words: “Apple’s problem today is that it's just plain boring. Yeah, it makes a lot of money, and yeah, it makes good products, but people forget that tech stocks are all about who's got the most glam.”

2. Headline headaches. 

One minute Tim Cook is defending tax-dodging practices that screw American taxpayers out of billions and leave us with no money to pay for decent schools that, you know, educate Apple’s workers or roads that, ahem, allow the company to ship its products around the country. The next minute Apple is on the hot seat for allegedly fixing prices on ebooks -- and we’re talking emails between Steve Jobs and James Murdoch (son of Rupert) in which Jobs essentially says, hey, let’s make a deal that screws our customers!
These are not the sorts of activities many customers will find endearing. Making headlines for all the wrong reasons is not going to help Apple get its mojo back. Gangsta-style capitalism is a lot of things – cool is not one of them.

3. Going Wall Street. 

Apple’s customers have long hailed the company for its snazzy designs and user-friendly interface. But its ability to excel in playing Wall Street casino games was never really on the list.

These days, however, Apple is all about Wall Street. The company is sitting on a mountain of cash, but instead of doing something useful and intelligent with that money such as, I dunno, paying workers a decent salary or investing in innovative new products, Apple announced it is spending an eye-popping $60 billion on a buyback. Stock buybacks, a practice that took off in the go-go ‘80s, is a pernicious trend in which a company buys back its own shares from the marketplace and thereby reduces the number of outstanding shares. It’s a terrible way to allocate resources, and it’s mainly about making executives richer. As Eamonn Fingleton recently put it over at Forbes, “every dollar spent on a buyback is one dollar less invested in a corporation’s future.”

Economist William Lazonick, head of the Center for Industrial Competitiveness at the University of Massachusetts, has criticized buybacks because they are designed to manipulate stock prices, reward executives at the expense of other stakeholders, and are often accompanied by things like insider trading. As Lazonick explained in an AlterNet series, “Corporations For the 99%,” stock buybacks have no positive economic purpose and we should “ban large established companies from buying back their own stock, and reward them instead for investing in the retention and training of their employees.”

Doing stock buybacks, along with other practices like giving executives obscene pay packages compared to workers (Apple execs are among the highest paid in the country), are examples of what economists call the financialization of corporations –which is a major driver of economic inequality, stagnation and social unrest.

Definitely not cool.

4. The Jobsless factor. 

Complaints that Apple has gotten boring are usually followed by the observation that it wasn’t like that when Steve Jobs was around. Under Steve Jobs, the thinking goes, Apple was super-fresh, but now it’s gotten stale and kind of bland.

However you feel about Steve Jobs, he’s an icon of American business, and his vision is considered by many to have been an essential element in the Apple success story -- the kind of vision needed to imagine new territories and untapped markets. Even 16 months after Jobs’ death, Apple executives like Chairman Art Levinson described how “weird” it was to work without the inspirational leader.

5. War on workers. 

 

When a company starts getting a reputation for greed and profit-maximization rather than product development and employee satisfaction, the cool factor tends to suffer. Screwed-over workers is not something you want people to think about when they see your logo.

As Daniel Huang of PolicyMic has observed, Apple’s main supply chain partner is none other than Foxconn Corporation, a ginormous global contract manufacturer that employs 1.2 million Chinese workers, some of whose deaths and suicides as a result of horrific working conditions started to make international news in 2010.

And Apple’s apparent disregard for the well-being of its workers is not confined to overseas suppliers. In a New York Timespiece about Apple’s badly paid employees in the U.S., David Segal outlines the frustration felt by Americans who would like to feel pride working for a company whose products they have admired, but have to suffer with peanut wages, unpleasant working conditions and knowing that they will have little to show for helping to make a success of a company that enjoyed $16 billion in sales in 2011. As Segal explained:

“About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year. They work inside the world’s fastest growing industry, for the most valuable company, run by one of the country’s most richly compensated chief executives, Tim Cook. Last year, he received stock grants, which vest over a 10-year period, that at today’s share price would be worth more than $570 million.”

Apple likes to boast that it’s a job creator, but most of the jobs it has created are in the service industry, and it seems determined to pay those workers as little as possible and make sure they can’t make a career with the company. Not cool.

6. Pissing off customers. 

Apple seems to have a knack lately for kicking its customers in the teeth. Remember when it replaced Google maps on the iPhone with shitty maps that gave out bad driving directions and so on? The bad vibes were so thick that Tim Cook had to write a letter of apology to customers.
That’s just the latest in a slew of actions that have raised customer hackles, from punishing early adopters of products by quickly slashing prices after a much-hyped launch, to releasing new versions so quickly with aggressive upgrade cycles that customers feel betrayed.

Apple has even managed to screw customers with actual screws – switching to a new kind of screw so that you can’t open your iPhone.

Lynn Parramore is an AlterNet senior editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of 'Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.' She received her Ph.d in English and Cultural Theory from NYU, where she has taught essay writing and semiotics. She is the Director of AlterNet's New Economic Dialogue Project. Follow her on Twitter @LynnParramore.

Has There Been a Great Progressive Reversal? How the Left Abandoned Cheap Electricity

Environment  

AlterNet / By Michael Shellenberger, Ted Nordhaus

Has There Been a Great Progressive Reversal? How the Left Abandoned Cheap Electricity

The authors say the Left went from viewing cheap energy as a fundamental human right to a threat to the planet and harmful to the poor. (With a response by AlterNet's Enviro editor Tara Lohan.)

 

 

Photo Credit: wang song/ Shutterstock.com

June 4, 2013  |  

 

 

Editor's Note: From time to time we publish articles we don't necessarily agree with. We encourage differences of opinion, for the sake of open debate. Here, AlterNet's environmental editor Tara Lohan responds to Ted Nordhaus and Michael Shellenberger at the end of their article.

Eighty years ago, the Tennessee Valley region was like many poor rural communities in tropical regions today. The best forests had been cut down to use as fuel for wood stoves. Soils were being rapidly depleted of nutrients, resulting in falling yields and a desperate search for new croplands. Poor farmers were plagued by malaria and had inadequate medical care. Few had indoor plumbing and even fewer had electricity.

Hope came in the form of World War I. Congress authorized the construction of the Wilson dam on the Tennessee River to power an ammunition factory. But the war ended shortly after the project was completed.

Henry Ford declared he would invest millions of dollars, employ one million men, and build a city 75 miles long in the region if the government would only give him the whole complex for $5 million. Though taxpayers had already sunk more than $40 million into the project, President Harding and Congress, believing the government should not be in the business of economic development, were inclined to accept.

George Norris, a progressive senator, attacked the deal and proposed instead that it become a public power utility. Though he was from Nebraska, he was on the agriculture committee and regularly visited the Tennessee Valley. Staying in the unlit shacks of its poor residents, he became sympathetic to their situation. Knowing that Ford was looking to produce electricity and fertilizer that were profitable, not cheap, Norris believed Ford would behave as a monopolist. If approved, Norris warned, the project would be the worst real estate deal “since Adam and Eve lost title to the Garden of Eden.” Three years later Norris had defeated Ford in the realms of public opinion and in Congress.

Over the next 10 years, Norris mobilized the progressive movement to support his sweeping vision of agricultural modernization by the federal government. In 1933 Congress and President Roosevelt authorized the creation of the Tennessee Valley Authority. It mobilized thousands of unemployed men to build hydroelectric dams, produce fertilizer, and lay down irrigation systems. Sensitive to local knowledge, government workers acted as community organizers, empowering local farmers to lead the efforts to improve agricultural techniques and plant trees.

The TVA produced cheap energy and restored the natural environment. Electricity from the dams allowed poor residents to stop burning wood for fuel. It facilitated the cheap production of fertilizer and powered the water pumps for irrigation, allowing farmers to grow more food on less land. These changes lifted incomes and allowed forests to grow back. Although dams displaced thousands of people, they provided electricity for millions.

By the '50s, the TVA was the crown jewel of the New Deal and one of the greatest triumphs of centralized planning in the West. It was viewed around the world as a model for how governments could use modern energy, infrastructure and agricultural assistance to lift up small farmers, grow the economy, and save the environment. Recent research suggests that the TVA accelerated economic development in the region much more than in surrounding and similar regions and proved a boon to the national economy as well.

Perhaps most important, the TVA established the progressive principle that cheap energy for all was a public good, not a private enterprise. When an effort was made in the mid-'50s to privatize part of the TVA, it was beaten back by Senator Al Gore Sr. The TVA implicitly established modern energy as a fundamental human right that should not be denied out of deference to private property and free markets.

The Rejection of the State and Cheap Energy

Just a decade later, as Vietnam descended into quagmire, left-leaning intellectuals started denouncing TVA-type projects as part of the American neocolonial war machine. The TVA’s fertilizer factories had previously produced ammunition; its nuclear power stations came from bomb making. The TVA wasn’t ploughshares from swords, it was a sword in a new scabbard. In her 1962 book Silent Spring, Rachel Carson described modern agriculture as a war on nature. The World Bank, USAID, and even the Peace Corps with its TVA-type efforts were, in the writings of Noam Chomsky, mere fig leaves for an imperialistic resource grab.

Where Marx and Marxists had long viewed industrial capitalism, however terrible, as an improvement over agrarian feudalism, the New Left embraced a more romantic view. Before the arrival of “progress” and “development,” they argued, small farmers lived in harmony with their surroundings. In his 1973 book, Small is Beautiful, economist E.F. Schumacher dismissed the soil erosion caused by peasant farmers as “trifling in comparison with the devastations caused by gigantic groups motivated by greed, envy, and the lust for power.” Anthropologists like Yale University’s James Scott narrated irrigation, road-building, and electrification efforts as sinister, Foucauldian impositions of modernity on local innocents.

With most rivers in the West already dammed, US and European environmental groups like Friends of the Earth and the International Rivers Network tried to stop, with some success, the expansion of hydroelectricity in India, Brazil and elsewhere. It wasn’t long before environmental groups came to oppose nearly all forms of grid electricity in poor countries, whether from dams, coal or nuclear. “Giving society cheap, abundant energy,” Paul Ehrlich wrote in 1975, “would be the equivalent of giving an idiot child a machine gun.”

Elaborate justifications were offered as to why poor people in other countries wouldn't benefit from cheap electricity, fertilizer and roads in the same way the good people of the Tennessee Valley had. Biomass (e.g., wood burning), solar and efficiency “do not carry with them inappropriate cultural patterns or values.” In a 1977 interview, Amory Lovins added: “The whole point of thinking along soft path lines is to do whatever it is you want to do using as little energy — and other resources — as possible.”

By the time of the United Nations Rio environment conference in 1992, the model for “sustainable development” was of small co-ops in the Amazon forest where peasant farmers and Indians would pick nuts and berries to sell to Ben and Jerry’s for their “Rainforest Crunch” flavor. A year later, in Earth in the Balance, Al Gore wrote, “power grids themselves are no longer necessarily desirable.” Citing Schumacher, he suggested they might even be “inappropriate” for the Third World.

Over the next 20 years environmental groups constructed economic analyses and models purporting to show that expensive intermittent renewables like solar panels and biomass-burners were in fact cheaper than grid electricity. Greenpeace and WWF hired educated and upper-middle class professionals in Rio de Janeiro and Johannesburg to explain why their countrymen did not need new power plants but could just be more efficient instead.

When challenged as to why poor nations should not have what we have, green leaders respond that we should become more like poor nations. In The End of Nature, Bill McKibben argued that developed economies should adopt “appropriate technology” like those used in poor countries and return to small-scale agriculture. One “bonus” that comes with climate change, Naomi Klein says, is that it will require in the rich world a “type of farming [that] is much more labor intensive than industrial agriculture.”

And so the Left went from viewing cheap energy as a fundamental human right and key to environmental restoration to a threat to the planet and harmful to the poor. In the name of “appropriate technology” the revamped Left rejected cheap fertilizers and energy. In the name of democracy it now offers the global poor not what they want — cheap electricity — but more of what they don’t want, namely intermittent and expensive power.

From Anti-Statism to Neo-Liberalism

At the heart of this reversal was the Left’s growing suspicion of both centralized energy and centralized government. Libertarian conservatives have long concocted elaborate counterfactuals to suggest that the TVA and other public electrification efforts actually slowed the expansion of access to electricity. By the early 1980’s, progressives were making the same claim. In 1984, William Chandler of the WorldWatch Institute would publish the “The Myth of the TVA,” which claimed that 50 years of public investment had never provided any development benefit whatsoever. In fact, a new analysis by economists at Stanford and Berkeley, Patrick Klein and Enrico Moretti, find that the "TVA boosted national manufacturing productivity by roughly 0.3% and that the dollar value of these productivity gains exceeded the program's cost."

Even so, today's progressives signal their sophistication by dismissing statist solutions. Environmentalists demand that we make carbon-based energy more expensive, in order to "harness market forces" to cut greenhouse gas emissions. Global development agencies increasingly reject state-sponsored projects to build dams and large power plants in favor of offering financing to private firms promising to bring solar panels and low-power "microgrids" to the global poor — solutions that might help run a few light bulbs and power cell phones but offer the poor no path to the kinds of high-energy lifestyles Western environmentalists take for granted.

Where senators Norris and Gore Sr. understood that only the government could guarantee cheap energy and fertilizers for poor farmers, environmental leaders today seek policy solutions that give an outsized role to investment banks and private utilities. If the great leap backward was from statist progressivism to anarcho-primitivism, it was but a short step sideways to green neoliberalism.
But if developed-world progressives, comfortably ensconced in their own modernity, today reject the old progressive vision of cheap, abundant, grid electricity for everyone, progressive modernizers in the developing world are under no such illusion. Whether socialists, state capitalists, or, mostly, some combination of the two, developing world leaders like Brazil’s Lula da Silva understand that cheap grid electricity is good for people and good for the environment. That modern energy and fertilizers increase crop yields and allow forests to grow back. That energy poverty causes more harm to the poor than global warming. They view cheap energy as a public good and a human right, and they are well on their way to providing electricity to every one of their citizens.

The TVA and all modernization efforts bring side effects along with progress. Building dams requires evicting people from their land and putting ecosystems underwater. Burning coal saves trees but causes air pollution and global warming. Fracking for gas prevents coal burning but it can pollute the water. Nuclear energy produces not emissions but toxic waste and can result in major industrial accidents. Nevertheless, these are problems that must be dealt with through more modernization and progress, not less.

Viewed through this lens, climate change is a reason to accelerate rather than slow energy transitions. The 1.3 billion who lack electricity should get it. It will dramatically improve their lives, reduce deforestation, and make them more resilient to climate impacts. The rest of us should move to cleaner sources of energy — from coal to natural gas, from natural gas to nuclear and renewables, and from gasoline to electric cars — as quickly as we can. This is not a low-energy program, it is a high-energy one. Any effort worthy of being called progressive, liberal, or environmental, must embrace a high-energy planet.


******

What 'Cheap' Energy? A Response by AlterNet's Environmental Editor Tara Lohan

Michael Shellenberger and Ted Nordhaus believe that the left has abandoned cheap energy, but the truth is cheap energy doesn’t really exist anymore. We’ve dammed two-thirds of the globe’s major rivers and we’ve drilled and mined the easiest to reach fossil fuels. Cheap energy also doesn’t exist because we’ve come to understand that massive hydro projects and burning fossil fuels come with a price tag — a cost to human health and the environment that gets externalized and is a price often paid by the poorest. Asthma, heart disease, cancer, undrinkable water, and unlivable homes are just some of the bills that have come due for communities that live near areas where fossil fuels are extracted or burned. And this so-called “cheap" energy that is often produced — where does it go? Are the communities of Appalachia any richer for the coal mining that’s taken place there for 100 years? Coal that keeps the lights on in Washington DC and in China. 

When Shellenberger and Nordhaus get to the end of their piece and assert that, “the 1.3 billion who lack electricity should get it. It will dramatically improve their lives, reduce deforestation, and make them more resilient to climate impacts,” I’m not convinced at all of how exactly they plan to provide that energy. I only know it’s supposed to be “cheap” and shouldn’t come from “intermittent” renewable sources.  

There are very few progressives and environmentalists who would argue that poor people around the globe should be denied access to food and electricity that will improve their lives, as Shellenberger and Nordhaus seem to assert. Although since both movements are large and diverse, it would be impossible to generalize about everyone as they seem to.

It is important to understand that poor communities not only bear the brunt of resource extraction and development, they will also suffer theworst impacts of climate change. And it is poor nations that have been outspoken in demanding action on climate change, including drastically reducing global greenhouse gas emissions.   

Shellenberger and Nordhaus are quick to criticize the left and groups like International Rivers for being opposed to massive hydro power plants, but what about the communities that actually live there? It turns out that there is huge backlash against such projects by local and indigenous communities across the globe, in Brazil, Guatemala, Ethiopia, China, Malaysia, and other countries. These too are poor people and they’re likely to be even poorer—both culturally and economically—if they’re displaced from their traditional lands because of large dam building or the associated environmental/agricultural costs.

These are complex problems, and there are no easy solutions — and in fact solutions are likely to vary from one place to the next. What may be beneficial to one community, may not be in another. And certainly, regardless of which side of the political and ideological spectrum you’re on, the communities themselves should have the primary voice. 

Yet Shellenberg and Nordhaus assert that burning coal saves trees, an idea that would be laughable to Appalachians who’ve watched their forested mountaintops be blown off for coal mining. And to say that “Fracking for gas prevents coal burning but it can pollute the water” is a gross understatement. Fracking can and does pollute water. It also pollutes the air, emits more greenhouse gases during extraction than the industry would like to admit, fragments wildlands, industrializes rural and suburban communities, and sickens people. 

Let’s not trivialize the impacts of fossil fuel extraction; this is serious business. If we’re going to find solutions, we have to be realistic and forward-thinking. It’s hard to see how the "modernization and progress" they espouse comes from pushing for more reliance on the dirtiest forms of energy we know.  

Ted Nordhaus and Michael Shellenberger are leading global thinkers on energy, climate, security, human development, and politics.

Your student loan isn’t really a loan

SALON

Wednesday, Jun 5, 2013 07:45 AM EDT

Your student loan isn’t really a loan

You can't refinance, or get rid of the debt through bankruptcy. Here's how it's even more of a sham than you know

By David Dayen

Topics: Student Loan Debt, student loans, Student Debt, Students, Congress, Kirsten Gillibrand, Elizabeth Warren, bankruptcy, College, Federal Reserve, Social Security, College tuition, Editor's Picks, Barack Obama, Business News, Politics News

 

 

(Credit: hxdbzxy via Shutterstock/Salon)

It’s becoming an annual ritual. Every June, Congress debates what to do about the interest rate on federally subsidized student loans, to avert what this year will be the imminent doubling from 3.4 percent to 6.8 percent. But interest rates alone don’t tell the whole story.

At a time when overall student debt approaches $1 trillion, the facts reveal that student loans aren’t loans, not in the traditional sense. They exhibit none of the qualities of modern consumer financial instruments, and are often sold under false pretenses, with the promise of a lifelong benefit that never materializes. We need to change how these loans work and have a broader conversation about what we should be doing — including bankruptcy and refinancing — to help future generations obtain a quality, affordable education, which is critical to our economic future.

The roughly two-thirds of U.S. students who take out loans to finance their college education can end up in a situation most resembling the historical concept of indenture. In medieval times, peasants would sign deeds to work land, which would then get cut in a jagged line (looking like teeth, or “dentures”). Each party would get half, and rejoining them would prove the authenticity of the contract. Colonial indentures would trade years of labor for the opportunity of transportation to the New World. The indentured could not alter the terms of the contract, no matter their circumstances. One way or another, the debt would get paid.

This is basically how student loans work. A college student might remember freshman orientation, when an instructor told them to look to their left and right, explaining, “One of you won’t graduate.” But student loans aren’t extinguished for those who don’t finish college; instead, the debt becomes a burdensome reminder of this early mistake in life. This is also true for students snookered into matriculating at sketchy for-profit colleges, which offer almost no marketable skills or career preparedness to justify the cost. And it further describes recent college graduates who, through an accident of timing, entered the real world during the Great Recession and its aftermath, finding it difficult to obtain work in their field of study.

Due to these combined factors, delinquency rates for student loans – unlike auto, credit card or even mortgage debt – have risen the past two years, according to the Federal Reserve Bank of New York. But student debt is something you carry for the rest of your life. It’s nearly impossible to refinance student loans, despite the current low-rate environment, primarily because of the high credit risk and lack of collateral. And unlike most other loans, you cannot get rid of student debt through bankruptcy.

This happened almost by accident. Before 1976, student debt was treated the same as any other in the bankruptcy process. Amid rising default rates – yes, even back then – Congress got it in its head that people were ripping off the government for a free education and then shedding the loans (a couple well-placed stories about doctors declaring bankruptcy after graduating from medical school added to the panic). In an effort to stop this, Congress passed a law permitting students only to discharge loans in bankruptcy five years after origination, unless they demonstrated undue hardship.

In 1990 the five-year rule was extended to seven years, and then in 1998 Congress dropped that requirement altogether, making undue hardship the only way to discharge student loans in bankruptcy. And undue hardship is a very large chore to prove, according to Bob Lawless, law professor at the University of Illinois. “The courts require proof of an inability to get by without a modification,” Lawless told Salon. “They’re reluctant to allow a discharge if someone just has a lower-paying job and can’t afford the payment.” So the bankruptcy law has become harsher at the same time that college tuition has ballooned, increasing demand for student loans. As then-law professor Elizabeth Warren said in 2007, “Why should students who are trying to finance an education be treated more harshly than someone… who racked up tens of thousands of dollars gambling?”

In addition to having no escape from their loans, students must deal with aggressive creditors that can get to virtually any income source to secure payment – paychecks and tax refunds included. The Department of Education uses an “army of private debt collectors,” some of the most notorious financial operators out there, to intimidate and harass student borrowers. These collectors earned $1 billion in commissions from taxpayers in 2011. They get paid bonuses for extracting higher payments, and they can also rack up additional fees virtually endlessly. That’s because student debt has no statute of limitations on collectors, unlike most other forms of debt. The government can even collect student loan payments from Social Security checks, thanks to a 1996 law (this is not theoretical, as growing numbers of seniors are entering retirement with student debt).

So, through a series of bad laws, student debt has become an inescapable trap, a terrible burden on those whose higher education dreams don’t pan out, and a significant burden even on successful graduates. Loan debt now averages $26,000 per student, up 40 percent in seven years, with significant chunks owing $50,000 or $100,000. Princeton professor Jesse Rothstein argued in a recent working paper that graduates burdened by debt will choose higher-paying jobs to pay off the loans, draining the talent pool for lower-paid, but critical, “public interest” job sectors like education, government or non-profits. This further erodes the nation’s seed corn and funnels the best and brightest into the financial industry or other higher-paying power centers, reducing entrepreneurship in the bargain. Student debtors also put off major purchases like houses or cars, and the Federal Reserve believes this is having a serious negative effect on our economy.

How do we quit loading up 18 year-olds with a risky gamble that could impact the rest of their lives? It will take more than just a low interest rate, though a variable rate that changes over time (the House Republican plan) or one that isn’t capped (the Obama Administration plan) will just make things worse. Obviously a lower rate translates into lower payments, but it’s time to dismantle the treatment afforded student loans, and to eliminate the extreme dependence on them.

The National Consumer Law Center believes debt collection takes too much precedence over counseling, deferment, and debt consolidation plans. Student debt collections need a reasonable statute of limitations, with a safety net prioritized over endless harassment.

Help may come in the form of new Administration programs for income-based repayment (IBR). Under this program, low-income borrowers cancap payments at no more than 10 percent of their income over a 20-year period; any remaining debt is subsequently forgiven. Depending on changing circumstances, however, locking into IBR for 20 years could lead to paying more than the loan is worth. Rep. Karen Bass has a billreducing the IBR time to 10 years. That bill also extends deferment to unemployed borrowers interest-free.

Income-based repayment is mostly forward-looking, however, and students already saddled with debt need help. Students currently paying high interest rates should be able to refinance, and reap the rewards of the Federal Reserve’s quantitative easing that asset-holders have enjoyed for so long. Sen. Kirsten Gillibrand’s bill would mandate refinancing on all federal student loans into fixed 4 percent loans, which would benefit 90 percent of all current loans, and save 37 million borrowers around $14.5 billion in the first year alone. The Consumer Financial Protection Bureau has proposed a similar refinancing scheme for private student loans, which the government backstops anyway. The President constantly talks up the glories of refinancing for homeowners to reduce payments; students deserve the same lifeline.

The government must crack down on for-profit colleges, the place from which over half of student loan defaults emerge. The Obama Administration tried to cut off these colleges from eligibility for federal student aid if they didn’t meet certain criteria for getting their graduates gainfully employed and out of default. Unfortunately, the DC Circuit Court of Appeals struck down the rules. Congress could codify them into law, and it would definitely benefit students if they did. Otherwise, helping students pay for loans represents a huge subsidy to these unworthy for-profit college administrators.

The principle that bankrupt individuals should get a second chance at a fresh start has been established for hundreds of years; there’s no reason for student loans to be exempt. Law professor Bob Lawless believes that returning to the 1976-era treatment of student debt in bankruptcy, or even with a 5-year waiting period to deal with the moral hazard issue, could put downward pressure on the cost of college. “Lenders and schools aren’t bearing the financial costs of the bankruptcy laws, students are,” Lawless told Salon. If lenders had skin in the game on student debt, they might force schools to deliver a better product and ensure their income streams.

Ultimately, keeping college affordable is the answer. Costs are far outpacing inflation, and even fallbacks for lower-income students like community colleges have seen a dramatic loss of government funding support. Reducing student debt goes hand-in-hand with reducing the need for student loans. At $50,000 a year, the wage premium that college graduates get over their peers is almost not worth the pain and stress of overwhelming debt. And that exacerbates inequality, as economist Joseph Stiglitz points out. The wealthiest opt out of the student debt cycle, while the rest have to gamble with huge financial burdens in the hopes that they graduate and succeed.

You can make the argument that rising borrowing has exacerbated college cost escalation, with no improvement in the finished product. This entire system must be overhauled. Otherwise, it will continue to damage our economy by indenturing talented students, our greatest renewable resource.

David Dayen is a freelance writer based in Los Angeles, CA. Follow him on Twitter at @ddayen. More David Dayen.