It is beginning to look like the ultimate greed of those who manage money in our economy may be growing the ultimate problem that ends up sinking it.
I find bankers to be an unsavory bunch. They have money to lend but set what are at times almost unreasonable requirements, and their sole objective is to get you on the hook and as deeply committed to a loan as they possibly can. My father used to compare them to the leech that you just can seem to pull off.
They develop lending instruments that have no clarity, charge rates based on who you are and where you live. Credit cards are a classic example, with rates to 25% and debt that apparently lasts forever.
To me, the most insidious product is the student loan.
While the financiers will point out what great good it does by allowing students to get an education they "cannot afford," what they leave out is the real basic premise is to get a young person who has a great future earning potential locked into a loan that can be packaged and sold so everyone in the banking food chain is making money.
Student loans have fueled an explosion in tuition rates, because universities know they can raise tuition and the lenders will gladly match it with increased student loans.
Campus construction has mushroomed. You only have to look at the new USFSP Student Center to get a view of student loan money at work. Did the STUDENTS really NEED this?
Palaces to higher education are constantly being built while more and more classes are being conducted on line. Faculty salaries are through the roof, and administrators now earn as much as major corporate CEOs. It is all fueled by the easy access to money from student loans. Courses in everything but what the economy needs are developed. Faculty is populated and students encouraged to "find" themselves. And then there is final pitch: here is the student loan form.
There is growing concern about student debt. Every year more young people come out of college with overwhelming debt. Loan paybacks usually start with a short time after graduation. A student dealing with an $800 or more a month student loan needs a job he or she can count on right now.
People in the business world are starting to be concerned because these massive student debts. They limit risk taking. Employment with startup companies that may not be stable and settling for the sure thing rather that the most exciting or challenging job opportunity.
I have personally sat across the interview able from a recent graduate and had them break into tears explaining how they cannot accept my $65,000 dollar a year offer because with all their expenses and student loans it is not enough.
The bankers blew up the housing industry by their unfettered greed, and now they may just be ripping our future up by the roots.
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