They can’t, for the simple reason that Wall Street and Washington have a completely symbiotic relationship based on corporatism and crony capitalism.
In this respect, I highly recommend reading Brandon Smith’s phenomenal piece this morning at Alt-market.com. He argues that the best and most effective way to defeat financial corruption and change the system is simple: Stop participating in the system in the first place!
Brandon’s strategy is elegantly simple and incredibly powerful. Individual actions — taking matters into your own hands – are always much more powerful than relying on a poisoned political and economic framework to solve our problems.
Think about it: Washington and Wall Street have us utterly convinced that the only answer to fighting back against economic injustice is to hand over even MORE power to the very systems that got us into this pickle in the first place.
Nowhere is this more evident than the current hubhub over student loans. While certainly understandable, the “where’s my bailout” mentality of some of the student loan activists is incredibly destructive because the system (Wall Street and Washington) will be only too happy to oblige with a solution – a solution that makes you worse off while making them even wealthier and more powerful.
Financial commentator Peter Schiff made an excellent point recently that bears repeating. If the government didn’t backstop student loans with its guarantees, you wouldn’t have a loan to begin with… Nor would you need one, because college would be vastly more affordable.
Guaranteed student loans don’t mean more access to education, they mean higher education costs. Universities are free to charge obscene tuitions precisely because the government guarantees the loan.
Before government guarantees of student loans in fact, college was much more affordable. According to Schiff;
- In 1810, the annual tuition at Yale was $33 and stayed that way until 1852. In today’s dollars, that would equate to an annual tuition of $2681.
- By 1918, the annual tuition at Yale had grown to $166. Keep in mind that this was post WWI and in the midst of a highly inflationary environment. A blue-collar Ford assembly line worker earning $5 per day would have to work for about a month to afford the annual tuition.
- Today, an annual tuition at Yale costs $36,500 – up 50% in just the last 10 years. For an average worker earning $40,000 ($25,000 after taxes), he or she now needs to work for a year and a half to pay for a year of college.
As this should make abundantly clear, college education costs in the U.S. have de-coupled from reality… And the fraudulent student loan system is the culprit. Its purpose is not to provide better education opportunities for the young, but rather to indenture them in a criminally perverse form of lifelong debt servitude to Wall Street.
Crushing student loan debt becomes the price you pay to achieve success, despite the fact that in many colleges today an “education” is little more than a corporate-minded youth resort that extends adolescence. Then, student loan debt is made permanent and unbreakable. Lifelong debt serfdom and servitude to the financial sector is the result.
So, what’s the solution?
Simply walk away… Stop participating in a corrupt system and don’t accept the false choices the system offers you. Make your own choices.
What this means in practical terms is simple. Whether you’re a high school student thinking about college, or parents fretting about the obscene costs of a college education think outside the box.
As I’ve pointed out here, there are all sorts of new and innovative educational ideas that are now being seriously considered by those who truly want to learn.
Better yet, as Simon Black has pointed out, if you’re considering college, who says you have to go to a U.S. college at all? Why not get out of the U.S. altogether?
A year at Harvard costs $52,000, while the same year at the University of Cambridge in England costs around $19,000. Erasmus University in the Netherlands is around $11,500 per year… Qatar University; $4000 per year.
I did a little research myself, and found more incredible deals: Full time tuition at Al Akhawayn University in Morocco, less than $10,000 per year. University of Canberra in Australia, about $20,000 per year, and Kings College in London, about $19,000 per year.
The bottom line is this: Don’t count on the government to provide solutions. Go out and create your own solutions. The establishment will always want to convince you that the only solutions out there are the ones they offer. Don’t take the bait. If you want to make the establishment obsolete, walk away from their corrupt system and create your own.