Links on Higher Ed and Housing

by Chris Sturr | February 13, 2015

University not Walmart 2-3-15 (1)

(1) Higher ed:  There’s a nice piece by Jefferson Fish at Psychology Today‘s website, of all places, on the corporatization of universities: A University Is Not Walmart. (Hat-tip to Polly Cleveland.) This is a wide-ranging overview piece, covering everything from student debt, to the rise in percentage of administrators on university payrolls vs. staff actually involved in teaching, to how universities favor faculty who can bring in grant money, to the shift to adjunct teaching, to how MGUs (Money Grubbing Universities, as frequent D&S blog reader TM calls them) profit from unpaid internships.

The image accompanying the article is the one above, of the amusement park at the center of the Mall of America outside of Minneapolis (I have been to it, years ago–it is a bizarre place). The connection with the article is explained in this paragraph:

In many ways, the modern American university is not unlike a shopping mall—a welcoming ambience, especially for students who grew up in the suburbs. Many university presidents now refer to students, without irony, as “customers,” and work to keep them happy and in a spending mood by fostering on campus the bland cheerful atmosphere found in shopping malls.

The only difference being that the students leave the universities with heaps of debt, whereas shopping mall customers… leave the malls with heaps of debt.

Fish also has an interesting piece linking the war on drugs to college student debt (here, also on Psychology Today‘s website–who knew they were running such great pieces?).

(2) Housing:  Mark Thoma had a post at his blog Economist’s View, Don’t Blame Poor People for the Housing Crisis that picks up on a post by Tyler Cowen at Marginal Revolution, Were Poor People to Blame for the Housing Crisis? (better to look at Thoma’s than Cowen’s so you won’t be exposed to the toxic comments by regular Marginal Revolution readers). And Thoma expands on it in a piece at CBS MoneyWatch: Low-income loans didn’t cause the financial crisis. You may assume that this question had been put to bed long ago (which I think it has), but the paper the posts are all referring to, “Changes in Buyer Composition and the Expansion of Credit During the Boom,” Manuel Adelino, Antoinette Schoar, and Felipe Severino (you can download the paper here) has some really striking findings. The basics (summarized best in Thoma’s MoneyWatch piece) have to do with the authors analysis of mortgage origination (on the one hand) and mortgage defaults (on the other) during the housing bubble:

While there was a rapid expansion in overall mortgage origination during this time period, the fraction of new mortgage dollars going to each income group was stable. In other words, the poor did not represent a higher fraction of the mortgage loans originated over the period. In addition, borrowers in the middle and top of the distribution are the ones that contributed most significantly to the increase in mortgages in default after 2007. Taken together, the evidence in the paper suggests that there was no decoupling of mortgage growth from income growth where unsustainable credit was flowing disproportionally to poor people.

Here are the graphs that strikingly illustrate this:

So the left-hand graph shows that the proportion of mortgages (measured in dollar value) going to each income quintile was basically stable in the run-up to the bursting of the housing bubble (with a slight increase around 2004 to the top 20% and corresponding decrease to the bottom 40%, but nothing huge). Meanwhile, the right-hand graph shows how delinquent mortgages increased dramatically for the top 40% between 2003 and 2006 (from 26% of the total defaults to a whopping 58%), and decreased dramatically for the bottom 40% (from 61% of the total defaults to 24%).

This just confirms what the experts had been saying all along, so it’s not really news (see, e.g., Jim Campen’s piece for us in 2010), but it nevertheless doesn’t satisfy the Marginal Revolution commenters (and some of the CBS MoneyWatch commenters) who won’t give up the Fox news talking points no matter what evidence you throw at them.

Meanwhile, Al Jazeera America has had a couple of pieces about the sorry situation for low-income buyers (and renters) in San Francisco: Affordable housing in San Francisco affordable only for upwardly mobile; and from earlier Classes clash as San Franciscans blame tech for rising rents.




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Greece and TINA: Syriza Igniting Debates

by Chris Sturr | February 11, 2015

Margaret Thatcher coined the radical neo-liberal slogan/mantra, “There Is No Alternative”—what most of us know as, “TINA.” Naomi Klein brilliantly developed the history and use of TINA in both theory and practice in her bestseller, The Shock Doctrine. TINA has been the driving force of the Troika, the EU and the US (to varying degrees) in dictating, justifying and implementing austerity, privatization drives, and most importantly—the deconstruction of anything “democratic.”   In the US, we have witnessed the Supreme Court’s Citizen’s United decision and, in Greece and the other debt-plagued EU nations (the “PIIGS”), anti-people memoranda and teams of Troika “administrators” have stripped autonomy from citizens.

Over the past five years, since the New Democracy (ND)-PASOK coalition ruled as the Troika’s go-between in Greece, that government and the media elite in Greece constantly claimed that the main reason their austerity programs hadn’t worked was that parties and groups—like newly-elected Syriza—disagreed and “wouldn’t go along.”   The “nay-sayers” were the problem, and the country needed to maneuver “with one voice”—their voice.

This same theme reared its ugly head yesterday in the Hellenic Parliament as Syriza wound up its three-day presentation of its political program, as the ND and PASOK opposition warned that, “Greece must go to into negotiations with one voice.” The problem is that this is symptomatic of the larger problems that Greece’s new finance minister, Yanis Varoufakis, is pointing out (among other things): in democracies, people disagree.   And to even passive observers, that was on display when Varoufakis met with his German counterpart, Wolfgang Schäuble, when they parted, and Varoufakis stressed that they, “…didn’t even agree to disagree.”

Syriza, and Greece, disagree. They disagree with the continuation of the inhuman pain and suffering being inflicted on the Greek people who didn’t make the decision to enter into those deals, and who didn’t pay Goldman Sachs to cook the books to allow Greece’s fraudulent entry into the Eurozone.

As my good friend, and long-time Syriza international relations point man, Panos Trigazis, pointed out in his 2010 book, TINA Is Dead, there are alternatives, and they are being placed squarely and plainly on the Troika’s and the world’s table.   Whether or not they will succeed is another matter completely. The spark has been struck—in Greece, in Spain, across Europe—and the world has taken notice.

As part of their negotiating strategy and their domestic political strategy, Syriza is clearly not putting all of their cards on the table. Who would?

Critics are crying that Syriza’s stance on ending austerity is threatening the annihilation of the EU. Good! We have been witnessing a regime that nakedly puts banks and creditors ahead of people—and they want to call it, “democracy!” That won’t wash anymore, because TINA is Dead!

In Germany some are mocking and warning that the “Greek Dream” could turn into an EU nightmare. Good! Let the technocrats tremble or up the ante. This is not a card game, however. This is a fight for self-determination, self-respect and dignity for the Greek people.

Mike-Frank Epitropoulos teaches Sociology and is the Director of the Pitt in Greece and Pitt in Cyprus programs at the University of Pittsburgh. He spent three years teaching in both private and public-sector higher education in Greece before returning to the United States in 2007.



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