The Daily Parker

Politics, Weather, Photography, and the Dog

Student debt and deflation

As someone with both student debt and mortgages, our encroaching deflation (and consistent below-target inflation) frustrates me. Take a look at this special report by Crain's showing how bad the problem of student debt has become in general:

The share of college grads owing at least $30,000 in inflation-adjusted dollars jumped from 6 percent to 30 percent in the eight years ended in 2012, according to the College Board, while the average debt of new graduates in Illinois ballooned 85 percent, to $29,984, over the last decade. Among 46 Illinois schools reporting data to the Princeton Review, 19 say 2014 graduates' debt averaged more than $30,000. Debt for graduates of the School of the Art Institute of Chicago was $42,097, topped only by downstate MacMurray College's $50,039. Neither school commented.

A study published in 2014 by the Federal Reserve Bank of Philadelphia, noting that small businesses account for about 60 percent of net jobs and rely primarily on personal debt for startup capital, found "a significant and economically meaningful negative correlation" between growth of student debt and small-business formation.

February's unemployment rate for 25- to 34-year-olds was a seasonally adjusted 5.1 percent, not much higher than the 4.9 percent overall rate and down from 9 percent four years ago. Yet median compensation for 30-year-olds in 2014 has dropped over the last decade to mid-1980s levels, according to the Center for American Progress in Washington, D.C.

So let's review:

  • You need a college degree to meet the minimum qualifications for most jobs.
  • College costs have risen at multiples of inflation for 20 years or more.
  • Students have to borrow more money than ever before to get the college degrees they need to get jobs.
  • The resulting debt service depresses consumer spending, reducing demand for goods and services, and making the jobs even scarcer.
  • Republican Party policies aimed at reducing taxes and government spending, especially in the wake of the 2008 crash, have also suppressed demand for services.
  • Republicans have also simultaneously chipped away at the social safety net built up by bipartisan governments from 1934 to 1976, making repaying debt even harder for people living on the edge.
  • Let's not forget the Republican-drafted, Bush-approved bankruptcy law of 2005 that makes it impossible to get out from under crushing student-loan debt in most circumstances.
  • All of these Republican policies cause—cause—lower inflation verging on deflation, which makes it harder to repay debts. Keep in mind that the biggest beneficiaries of lower inflation are the bankers who contribute disproportionately to Republicans.

As we say in software, the transfer of wealth from young students to old bankers is a feature, not a bug, of Republican economic and tax policies.

You want to know how to keep student debt from destroying the Millennials? Simple. Government stimulus to get us out of the deflation trap, and allowing student loans to be discharged in bankruptcy.

You want to know how to do those things? Simple. Elect Democratic majorities in Federal and state legislatures, and vote for Hillary Clinton on November 6th.

Qualifications for president

Via Fallows, I'm now reading the transcript of Donald Trump's recent meeting with the Washington Post editorial board. It's...I don't even know how to describe it. He makes no sense. Example, from early on:

[Fred] HIATT [WaPo editorial page editor]: The root of many people’s unhappiness in Baltimore was the perception that blacks are treated differently by law enforcement. And the disproportionate – do you think it’s a problem that the percentage of blacks in prison is higher than whites, and what do you think is the root of that situation?

TRUMP: Well I’ve never really see anything that – you know, I feel very strongly about law enforcement. And, you know, if you look at the riot that took place over the summer, if that were stopped – it all, it mostly took place on the first evening, and if that were stopped on the first evening, you know, you’d have a much nicer city right now, because much of that damage and much of the destruction was done on Evening One. So I feel that law enforcement, it’s got to play a big role. It’s got to play a big role. But that’s a pretty good example, because tremendous amounts of damage was done that first evening – first two evenings, but the first evening in particular. And so I’m a very strong believer in law enforcement, but I’m also a very strong believer that the inner cities can come back.

HIATT: Do you see any racial disparities in law enforcement – I mean, what set it off was the Freddie Gray killing, as you know. Is that an issue that concerns you?

TRUMP: Well, look, I mean, I have to see what happens with the trial. I—

HIATT: Well, forget Freddie Gray, but in general, do you believe there are disparities in law enforcement?

TRUMP: I’ve read where there are and I’ve read where there aren’t. I mean, I’ve read both. And, you know, I have no opinion on that. Because frankly, what I’m saying is you know we have to create incentives for people to go back and to reinvigorate the areas and to put people to work.  And you know we have lost million and millions of jobs to China and other countries. And they’ve been taken out of this country, and when I say millions, you know it’s, it’s tremendous. I’ve seen 5 million jobs, I’ve seen numbers that range from 6 million to, to smaller numbers. But it’s many millions of jobs, and it’s to countries all over. Mexico is really becoming the new China. And I have great issue with that. Because you know I use in speeches sometimes Ford or sometimes I use Carrier – it’s all the same: Ford, Carrier, Nabisco, so many of the companies — they’re moving to Mexico now. And you know we shouldn’t be allowing that to happen. And tremendous unemployment, tremendous. They’re allowing tremendous people that have worked for the companies for a long time, they’re allowing, if they want to move around and they want to work on incentives within the United States, that’s one thing, but when they take these companies out of the United States. Other countries are outsmarting us by giving them advantages, you know, like in the case of Mexico. In the case of many other countries. Like Ireland is, you’re losing Pfizer to Ireland, a great pharmaceutical company that with many, many jobs and it’s going to move to Ireland.

What...the...fuck is he talking about? Incoherent doesn't seem strong enough a word. The lack of thought, the lack of knowledge, the lack of any ability to discuss a real problem in a real way should be completely disqualifying.

But after the Republican Party has spent 50 years hammering into people the idea that coherent, reasoned, informed thought doesn't get the job done (and by extension, education is worthless and fast-talking liberals are trying to win one over on you), this was kind of inevitable, wasn't it?

Trump's woman troubles

Skipping Mitt Romney's dig that Trump's wives have been foreign-born because "there are jobs that Americans won't do," it's becoming obvious that Trump has a problem with women mocking him. New Republic's Jeet Heer explains:

An old-fashioned sexist boor, Trump tends to divide the world into a simple binary: men are rivals to be bested and women are potential sexual conquests. When he’s confronted by a strong, assertive woman outside the mating arena, his synapses tend to short-circuit, leading him to odd and often self-destructive behavior. Before Carly Fiorina’s presidential bid fizzled out, she was the only Republican who had managed to faze Trump at all. He walked back his initial attempt to insult her looks and found himself booed by the debate audience on November 10 when he snapped, “Why does she keep interrupting everybody?”

If the presidential contest does become a battle between Clinton and Trump, Clinton is likely to enrage Trump in much the way previous women have. This suggests a strategy of using the red cape of gender to enrage the bull-headed Trump—the better to get him to make mistakes that will prepare him for the slaughter. 

Trump’s problem with women is not just personal, of course, but political. According to a Reuters/Ipsos poll, half of American women have a “very unfavorable” view of him, which has led The Washington Post’s Paul Waldman to argue that Trump could face “the largest gender gap in history” in his race against Clinton.

That's a problem with running a campaign on instinct, and with a narcissism bordering on delusion (but on the other side of the border than most people). It shouldn't be too hard to goad him into a "self-destructive rage that will destroy his presidential aspirations," as Heer says. He's already come close enough.

During a four-hour WebEx session...

Stuff to read later:

OK, conference call is ending. Time to perambulate the pooch.

Turning mental illness into a nomination for President

I think we can all agree that Donald Trump believes everything he says. Either he's a genius bullshitter or he has narcissistic personality disorder. It doesn't really matter in the end, but James Fallows still tries to sort it out:

A reader makes what may by now be an obvious point but is still worth reckoning with. He was responding to the post in which I noted Trump’s combination of masterful TV performance and near-total ignorance of the actual job and challenges of being president.

Imagine going through life with the conceptual framework that you simply cannot be wrong. Facts would cease to matter, and education would largely be irrelevant, because you're the one who determines what is and isn't true. In fact, people who claim to have expertise would become the enemy because they would provide information that would exist outside of yourself. If everything you say is the ultimate, universal truth, than anything that exists outside of yourself must be deception.

I think that Trump earnestly believes every single thing that comes out of his mouth, and that the reason his beliefs seem to change is because his reality is fluid.

Sounds about right. But then again, Scott Adams could also be correct. Either way, having this man so close to becoming president scares me more than any of the usual knaves and rogues the GOP has nominated would have.

And there's this:

Articles to read while waiting for my next online meeting

Hillary Clinton and Donald Trump won their respective Illinois primary elections yesterday. And in other news:

Time to write some documentation. Whee.

Stuff I read at the library

I'm leaving Harold Washington in a few minutes, now that I've caught up on some reading:

I also watched a time-lapse video of the Chicago River turning green last year. If you want to see this odd Chicago tradition, go downtown tomorrow at 9.

Reading list for this evening

In between four rehearsals and two performances this week (Monday through Sunday), I'm taking tonight off. So while I have a minute or two between helping new developers understand some old code, I'm jotting down this list of things that looked particularly appealing when they came up on RSS feeds:

OK, the new devs are testing something...and more on that later.

When the steaks were lower

Think Progress grinds through the history of Trump Steaks™:

Reporters from Home magazine, Gourmet magazine, People, New York Daily News, and Every Day with Rachael Ray showed up to the launch, which featured speeches by both Levin and Trump. Trump took the opportunity to boast of the steaks’ quality, telling reporters that the product was going to be a boon for the company, equivalent to Trump Vodka, which had launched just a year earlier.

The steaks were only available for mail order, and ranged from the Classic Collection, which cost customers $199 for two filet mignons, two cowboy bone-in rib-eyes and 12 burgers, to $999 for 24 burgers and 16 steaks.

But despite the rash of media attention, [Sharper Image CEO Jerry] Levin said, the steaks just didn’t sell.

Not all reviews of Trump Steaks were bad. Sharon Dowell, former food editor for the Oklahoman, called the steaks “tender, juicy and absolutely among the best-tasting steaks I’ve cooked on my home grill.” The New York Post gave them a 7.5 out of 10, noting that it was “an undeniably good steak” — but still three times the price of another steak that they gave a 7 to in the same taste test. Gourmet, in their taste test, were less effusive, calling the steaks “edible, but not particularly good.”

Martha Stewart, however, had perhaps the most unique response to Trump Steaks. In an interview with Joan Rivers, the lifestyle mogul and former Apprentice contestant replied “Too bad!” when Rivers said that the steaks weren’t actually from a slaughtered Donald Trump.

This person is the front-runner for leadership of the Republican party.

How Trump behaves in private Chicago business deals

Not surprisingly, he behaves like a dick:

Though Trump is pitching himself to voters as a dealmaker who wins, the 12-year drama of the Trump International Hotel & Tower offers a more complicated narrative. While it reinforces his preferred image as a bold risk-taker and consummate salesman, it underscores his darker reputation as a bullying businessman willing to back out of deals and trash the competition when it's convenient. And that big TRUMP sign on the front of the building fits perfectly with the caricature of the developer as a narcissist and braggart.

Altogether, buyers of 43 condos—32 residential units and 11 hotel units—took advantage of [a 10% discount "friends and family"] deal, a group that included attorneys at DLA Piper, Trump's law firm, and architects at Skidmore Owings & Merrill, which designed the skyscraper. Some buyers demanded that Trump honor his original deal, and Trump backed down. Others were unwilling to jeopardize a valuable business relationship and simply accepted Trump's new terms without a fight.

Trump took on another group—his financial backers. Unable to pay off a maturing construction loan from a bank group led by Deutsche Bank, he sued them in 2008 for more time, citing a “force majeure” clause in his loan agreement. Such clauses are designed to give borrowers relief in the case of unforeseen, cataclysmic events, like floods or wars, but Trump argued that the financial crisis qualified. He also sought $3 billion in damages.

That a good 25% of American voters support this guy turns my stomach. But evidence about how he behaves, and how he repeatedly tries to screw his counterparties on deals, actually boosts his standing among those voters. Regardless of the outcome of this election—I'm hoping for something like the Whig implosion of 1852—it speaks poorly of our country that he's got this much support.