Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Friday, May 31, 2013

This Week in Poverty: Taking on Sallie Mae and the Cost of Education

Nearly two hundred students, parents, community members and union leaders rallied at Sallie Mae’s annual shareholder meeting in Newark, Delaware, yesterday. On the agenda: first, demand that the nation’s largest private student loan lender meet directly with students to discuss their crushing debt burden; and second, introduce a shareholder resolution calling for disclosure of the corporation’s lobbying practices and membership in groups such as the American Legislative Exchange Council (ALEC).

Outside of Sallie Mae’s corporate headquarters, the activists were met by “dozens of police, blockades and K-9 units,” according to participants. Sarita Gupta, executive director of Jobs with Justice–American Rights at Work, urged the crowd to confront Sallie Mae executives and board members “about their role in America’s student debt crisis.”

More than 38 million people now owe over $1.1 trillion in student debt; Sallie Mae owns approximately 15 percent of that debt, or $162.5 billion. Students owe an average of $27,000 when they graduate from college and many have a debt load several times greater than that amount. Nearly one in ten will default on their loans within two years.

Gupta noted that Sallie Mae “spent $16 million on federal lobbying from 2008 to 2012 and has more than sixty state lobbyists.” The corporation has lobbied at the federal level “to block student loan reform,” and at the state level “for reduced public investment in higher education, forcing more students to rely on private student loans.”

“They’re in the business of condemning students to a lifetime of debt, not making education a reality,” said Sara Fitouri, a law student at the University of Denver, who owes $145,000 in student debt.

“They show that when we privatize something that used to be in the public realm it can lead to horrible results,” said Sam Nelson, a junior at George Washington University who expects to graduate with approximately $50,000 in student loan debt.

Sallie Mae was indeed created as a government-sponsored enterprise in 1972, and transitioned to a fully privatized bank lender between 1997 and 2004. Organizers say that as the largest lender it now sets the trends and standards for the industry.

Gupta spoke out against profit margins that continue to increase for Sallie Mae as “student debt and student loan defaults escalate at an unsustainable pace.” She noted that the senior management team of five executives made more than $20 million combined in 2011; the former CEO—who just announced his retirement—was paid $35 million from 2007 to 2011.

Twenty of the activists entered Sallie Mae headquarters as legal proxies for shareholders with a right to vote. The groups they represented included: the United States Student Association, the Student Labor Action Project, Common Cause, the Responsible Endowment Coalition, the American Federation of Teachers (AFT) and Jobs with Justice–American Rights at Work. Sallie Mae personnel attempted to restrict these individuals to a holding area but the activists successfully negotiated their way into the meeting.

Prior to introducing the shareholders resolution, Randi Weingarten, president of the AFT, whose members’ pension plans have more than $1 trillion in assets and are long-term shareholders of Sallie Mae, said, “As Sallie Mae profits from billions of dollars of student loans, it has an obligation to students, educators and shareholders to be transparent about its lobbying efforts, including on student loan reform.”

The resolution asked that the board disclose in an annual report the corporation’s policies, procedures and payments for direct and indirect lobbying; as well as its membership and payments to any tax-exempt organization “that writes and endorses model legislation.” (See: ALEC.) Although there has yet to be a tally of the vote, organizers hope that they received the support of approximately 30 percent of the shareholders.

Following the vote, the students won a long-fought victory: newly named Sallie Mae CEO Jack Remondi agreed to their demand to meet next month. His predecessor had been steadfast in his refusal to allow the students a seat at the table.

“We are going to work hard and be ready to give him a run for his money,” said Nelson. “We’ll get a lot of no’s, but if we organize enough we might get a few yes’s. Ultimately though, what’s going to bring the pressure to [get] the change we need is what’s worked in the past for other issues—organizing, direct action and taking the fight to them in their own backyard.”

The promise of privatization of the student loan industry was that there would be greater efficiency and therefore more opportunities for students to pay for college and thrive. That is clearly not what Sallie Mae and the big banks have delivered to students like Sam, Sara and their families—not to mention the millions of young people who are priced out of college.

“After we win this campaign against Sallie Mae, we are not going to stop until student debt is a thing of the past,” said Nelson. “We fundamentally believe that education is a right and it should be free and accessible to all people who wish to pursue it. We know that free education has worked in the past, and that the government and companies are choosing not to do it—and to fight against it—for their own political or profit-motivated reasons.”

UPDATE: The resolution has received over 35 percent of shareholder votes. (Importantly, this figure understates support for the resolution, as there were a large number of abstentions counted as no votes.) Student organizers say that they are very pleased with this result.
Losing Hope in Detroit

Cross-posted from my new weekly column on the impact of sequestration at BillMoyers.com.

Jobs. They are supposedly the foremost concern of every Democrat and every Republican, and they are certainly the greatest concern for the 20 percent of American workers who are unemployed or underemployed, and the millions of people who have dropped out of the labor force altogether.

But you wouldn’t know it from Congress’s lack of urgency to confront and end $85 billion in across-the-board sequester cuts this year, despite the fact that these cuts are already reducing employment and shrinking gross domestic product, and straining state budgets as a loss of federal grants makes it more difficult to fund vital services.

Even the very programs designed to prepare the American workforce for high demand jobs—another Congressional favorite, at least rhetorically—are being squeezed.

Since 1968, Focus: HOPE has served the people of Detroit and its suburbs through career training, neighborhood revitalization and fighting hunger. The training programs have placed nearly 12,000 at-risk men and women in family-supporting careers, including machining, advanced manufacturing, information technology and engineering.

But according to Steve Ragan, chief development and external relations officer at Focus: HOPE, just as employers are ready to hire again in the Detroit metropolitan area, sequestration is limiting the organization’s ability to help those looking for work.

“We’re often contracting with regional or local Michigan workforce agencies, and they are very conscious of the impact of sequestration on their budgets, so it’s really slowed down funding at a time that is critical,” Ragan told me. “We’ve been waiting to see people hiring for a long time—now we have employers interested in hiring our students, a waiting list of people who want job training, but we can’t fund the programs as we have in the past.”

Ragan said that the information technology programs are being hit particularly hard, and the “Earn and Learn” program—focusing on jobs for at-risk minority youth and adults who have been incarcerated or are chronically unemployed—is expected to be discontinued. To date, Focus: HOPE is 35 percent behind budgeted revenue for workforce development, or approximately $800,000. The average job training cost per student is $5,000—though it varies greatly from program to program—which means that the organization is down 160 funded spots through two-thirds of its fiscal year. Ragan said at the current pace 250 to 350 students will miss out on job training and “the impact on personal lives and families is devastating.”

“Our capacity used to be limited not by money but by getting the students who could commit to the academic rigor of our programs,” said Ragan. “Now we are capped by money and it’s often a month-to-month challenge.”

These cuts are a serious blow to a community that is struggling. According to the Economic Policy Institute, the unemployment rate of African Americans in Michigan is 18.7 percent, about two and a half times that of whites (7.5 percent) as it has been for much of the last five years. The national black unemployment rate is 14 percent, and of the 24 states with large enough African-American populations to track with federal Current Population Survey data, Michigan has the highest African-American unemployment rate.

Most Focus: HOPE students come from the Detroit public school system and many have what Ragan described as “very serious foundational education problems.”

“In recent months, we had a student with a high school diploma who was reading at a 1st grade level,” said Ragan. “We see lots of students with 3rd, 5th or 6th grade reading and math levels—so our first task is usually bringing them up to a 7th or 8th grade level so they are prepared to study in our career training programs.”

Ragan said Focus: HOPE takes great pride in “maintaining a job placement rate in at least the high 70s for our graduates—and committing to lifetime assistance with job placement.” The organization also provides scholarships for graduates who want to pursue a bachelor’s or associate’s degree.

“We have partnerships with most of the universities in the area that have engineering and technology programs,” said Ragan.

Ragan emphasized that sequestration is the latest chapter in a “persistent reduction” of public investment in skilled job training that is “especially difficult in a struggling community like Detroit.”

“It’s been a huge mistake,” he said. “This is an investment in our economic recovery, but we are spreading reduced money among more people in need. We’ve become a victim of hyperbole and the political battle.”

Original Article
Source: thenation.com
Author: Greg Kaufmann

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