http://billmoyers.com/story/student-income-loans-transfer-wealth-investors-risk-students/

How Students’ Wealth is Redistributed to the Rich

Student income loans transfer wealth to investors, risk to students.

BY KENNETH J. SALTMAN | SEPTEMBER 19, 2016

Student activists from the various CUNY campuses across New York City hold a rally in front of Hunter College to demand divestment from Israel, the resignation of the CUNY board, free tuition, and a cancellation of student debt. (Photo by Andrew Lichtenstein/Corbis via Getty Images)

At more than $1.3 trillion as of 2016, US

student loan debt has become widely

discussed in the media, the business press and academia as a new debt bubble with the potential to burst

and trigger a global economic crisis that puts everyone at risk. The student debt bubble is regularly

compared to the subprime mortgage debt bubble that resulted in the failure of banks, the great recession

and the public bailout of Wall Street and the auto industry in 2008. Prior to the subprime crisis, high- and

low-risk mortgages were packaged together into investment bonds so that when enough of the high-risk

mortgages defaulted, the bonds that had been rated as safe collapsed. Similarly, one form of student debt

investment security, Student Loan Asset Backed Securities (SLABS), is composed of pooled student debt.

A crucial difference between the subprime debt bubble and the student debt bubble is that the properties

that comprised subprime mortgage securities served as collateral to the mortgage debt. If a homeowner

defaults on a mortgage, the bank claims the property in its stead. Student loan debt has traditionally not

been collateralized. In other words, if a student or former student defaults on student loans, there is no

tangible asset for the bank to claim. However, since a great deal of student loan debt has been federally

subsidized and especially reinsured, private banks that package student loan debt into investment

securities have been able to sell these investment securities because they carry the full faith and credit of

the federal government. Despite having no collateral, they have the federal guarantee.

In 2010, the federal government ended the Federal Family Education Loan Program (FFELP) that

federally subsidized and reinsured private loans that formed the basis of most SLABS, opting to shift

federally subsidized loans into direct federal loans issued through the Department of Education. Despite

the end of FFELP, privately held student loan debt and securities based on it accumulated prior to 2010

remain a massive outstanding debt that is predominately serviced, managed and collected by a single for-

profit corporation, Navient, that spun off from Sallie Mae. Sallie Mae was a public bank that lent to

students and was privatized by the Bill Clinton administration. Navient faces criminal charges of illegal

collection practices and defrauding borrowers and has come under fire most notably from Sen. Elizabeth

Warren (D-MA). With federal insurance and subsidy removed on these privately held FFELP loans as of

2010, Wall Street lost its enthusiasm for securitizing newly issued unsecured private debt, despite the fact

that bankruptcy laws make student loan debt extremely difficult to discharge through bankruptcy. Enter the

Student Income Loan.

Heather McGhee on Student Debt

BY BILLMOYERS.COM STAFF | APRIL 25, 2012

After the end of FFELP in 2010, private investors developed Student Income Loans (also known as

Income Share Agreements or ISAs), an “innovative” financing technique to expand private student loans

and develop a new kind of student debt investment security. Several for-profit and nonprofit companies,

such as 13th Avenue Funding, Lumni and Pave created Student Income Loans that provide tuition in

exchange for a percentage of future income. These lenders pool the Student Income Loans into

investment securities. The financiers have presented Student Income Loans as a service to students,

providing another avenue of educational finance and as an innovation in lending. Since the federal

government does not insure or subsidize the loans, the private investors make terms that mitigate their

risk while maximizing their profit. Profits can be enormous. The Wall Street Journal offers an example of a

student ultimately paying $60,000 for a $15,000 tuition loan.

One key way these Student Income Loan banks limit risk and maximize profit is by restricting loan

issuance to students who study subjects that are expected to result in high incomes, such as engineering,

or by restricting loans to graduate students in select fields. This instrumental and vocational tendency of

student income loans contributes to the rising clamor to defund elements of higher education that do not

directly result in commercial benefits for business, such as programs in the humanities and the arts, the

social sciences and even the abstract sciences.

Other new nontraditional private lenders post-FFELP cater to what Forbes calls “the indebted 1 percent”

because they have “racked up pricey and prestigious debt.” These banks capture the lowest-risk student

borrowers from the outstanding pool of the student loan debt that is eligible for refinancing — 75 percent of

the $1.2 trillion in debt. Companies like CommonBond ($100 million refinanced) and SoFi ($1 billion

refinanced) refinance student loan debt at lower rates than the federal government by cherry-picking the

students and graduates who are seen as the lowest risk of defaulting on their loans. By creaming off the

highest quality — that is, lowest risk — loans, Sofi and Common Bond are able to offer lower interest rates

only to the minority of borrowers who have an average income of more than $130,000 yet raise the overall

risk of other pooled federal student debt.

Higher education spending cuts by states need to be seen as effectively an upward redistribution scheme,

with tuition increasing by the same amount as public defunding, about 10 percent.

Another way Student Income Loans limit risk for investors is by pooling loans together in tranches (like

subprimes). Some Student Income Loan arrangements pool debtors together and make the default by one

debtor to cause the interest rates (percentage of future income taken) for all borrowers to rise. Lenders

like to make these pools of debtors out of students from the same alma mater so that there is an additional

sense of affiliation and moral obligation to fellow students. This arrangement adds a moral culpability onto

the borrower in such a way as to counter the rationality of homo economicus that drives these projects.

Why, after all, wouldn’t a rational economic actor seek to default on these loans in which the only collateral

is their future work and good will? By linking the fate of other borrowers in the investment security, lenders

levy on debtors a social stake in not defaulting (you, borrower, are screwing not just the rich greedy

banker but also your fellow student who has a precarious situation like yours). Of course, the truly social

act would be to dispense with the debt altogether and make the social obligation one for the entire society

to bear rather than restricted communities of borrowers.

Student Income Loans and other new nontraditional private student loans represent not merely a new form

of student loan financing but also: (1) a form of upward economic redistribution in the context of a broader

assault on public institutions, particularly on public higher education, and a downward transfer of

responsibility and risk onto youth; (2) a force for the neoliberal vocationalization and instrumentalism of

higher education that participates in the broader trend driven by neoliberal privatization and corporate

culture; and (3) a form of indenture that relies upon the fabrication of a specific form of restricted morality

and the capture of future forms of associated living. I suggest that these three key elements of Student

Income Loans need to be seen as a material and symbolic project of class warfare waged by the rich on

the rest.

An Assault on Public Higher Education

Following the great recession of 2008 and the ensuing rightist push for austerity, states and the federal

government significantly cut public higher education spending. Universities responded by raising tuition.

As is common during recessions, university enrollments increased. As students assumed debt to pay for

university, an effective redistributive transfer was accomplished whereby youth, among the most

economically vulnerable citizens, absorbed the costs. A number of states not only cut higher education

funding but also enacted educational privatizations and created slush funds for businesses. While

spending has not been fully restored, students are shouldering the debt burden and banks are profiting.

Black Students Feeling Especially Crushed By

Student Debt

BY RICHARD LONG | MAY 6, 2015

Higher education spending cuts by states need to be seen as effectively an upward redistribution scheme,

with tuition increasing by the same amount as public defunding, about 10 percent. Thirty-six percent of

undergraduates take federal student loans and 6 percent take more expensive private loans. Forty-seven

percent of public higher education revenue comes from tuition. The state defunding of public higher

education is regressive, much like the shift from an income tax to a sales tax, in that it puts more of the

burden on a smaller segment of the population while lifting the burden to pay for this public good through

taxation off of those with greater wealth and income.

The federal government also cut education spending in the wake of the recession. To make matters worse

the federal government “generated upward of $100 billion in revenues from its student loan operations

from 2008 to 2013.” To put this federal revenue generation in context, the money that students pay to the

federal government joins a pool of money that in the age of austerity decreasingly goes to pay for the

caregiving functions of the federal government but increasingly goes to pay for its punitive functions.

Perhaps most perniciously, half of federal discretionary spending goes toward the military and military-

related spending, while enormous amounts go to subsidize private industries such as corporate agriculture

and entertainment. In this regard, the shift of the costs of higher education onto students represents a kind

of debt spending by youth to fund the military and corporations. This generational pillage is not just

unethical but it represents an economic burden on future workers and consumers who will be spending to

service debt to create bank profits. In addition to being a financial redistribution, it also represents

atransfer of risk and responsibility.

As Andrew Ross explains, the transfer of fiscal responsibility from the state to the individual is a key

aspect of higher education privatization. He points out that it would only cost $87 billion to federally fund

every two- and four-year public college. This is a miniscule amount relative to the $1.22 trillion spent

annually by the federal government on tax breaks and less than the current $102 billion federal outlay for

education that represents just 2.67 percent of all federal spending.

Vocationalism and Instrumentalism

Student Income Loans further the vocationalizing and instrumentalizing trend that has been expanding

with the corporatization of higher education. The American Enterprise Institute, an outspoken neoliberal

advocate of Student Income Loans or Income Share Agreements (ISA), writes:

Because ISA investors earn a profit only when a student is successful, they offer students better terms for

programs that are expected to be of high value and have strong incentives to support students both during

school and after graduation. This process gives students strong signals about which programs and fields

are most likely to help them be successful.

In this context, successful means students endeavoring to pursue the highest-paying fields that are the

most directly commercializable. As Jeff Bryant of Salon writes, this will likely lead to students being

pushed into academic programs that are “financially incentivized” by investors rather than toward

programs that appeal to students’ imaginations, ideas or interests.

Bryant suggests that the dangers of the vocational tendencies of Student Income Loans may be harmful

not only to the pursuit of meaningful, passionate and interesting work but that it may be harmful to

business as well because “outliers” from the humanities often make important contributions to business.

He emphasizes that unless the interests and desires of a young student are math or science, “a quest for

personal development and intrinsic reward — becomes a lifelong liability regardless of personal

attributes.”

Moreover, making majors in the humanities, arts and social sciences more expensive will result in the

further gutting of these programs from universities and a reduction in the number of not just workers but

citizens who are educated in the knowledge and habits of society and self-reflection grounded in traditions

of culture and scholarly thought. There is more at stake than just individual economic opportunity.

As Henry Giroux argues, the undermining of the humanities as part of the war on public higher education

represents the production of civic illiteracy in that it deprives citizens of the intellectual tools to interpret

and intervene in public problems as well as a form of “organized forgetting” as the history is flattened into

a permanent present understood through acts of working and consuming.

These public and civic concerns expressed by Giroux seem not to be on the minds of the financiers

behind Student Income Loans. McGrath writes:

“Not to be glib about it,” says Tom Glocer, former Thomson Reuters CEO and a CommonBond equity

investor, “but if you’re coming to me for a loan and you’re a dentistry student at the University of

Pennsylvania, I’ll be more willing to make a loan than if you tell me you’re an art history major at Texas

Christian.”

Student Income Loans do not only allow the rich to own the labor of another, they also allow the rich to

create investment securities out of these collected pledges of future time and work while supporting the

institutions that have historically bolstered their own class interests. These speculative instruments then

serve as the basis for additional future private lending and in turn, yet more speculation. Ultimately,

Student Income Loans promote not only a strictly commercial way of seeing education and its social value

and defund fields of study alleged to have little commercial value, they also create a financial incentive to

avoid mass public funding of higher education while fueling a dangerous educational debt bubble.

KENNETH J. SALTMAN

Kenneth J. Saltman is a professor in the Educational Leadership and Policy

Studies Ph.D. program at the University of Massachusetts Dartmouth. Saltman is

the author most recently of Scripted Bodies: Corporate Power, Smart

Technologies, and the Undoing of Public Education (Routledge 2016).

https://www.theguardian.com/us-news/2017/dec/08/income-inequality-murder-homicide-rates

The surprising factors driving murder rates: income inequality and respect

Maia Szalavitz

Inequality predicts homicide rates ‘better than any other variable’,

says an expert – and it is linked to a highly developed concern for

one’s own status

Fri 8 Dec 2017 06.00 ESTLast modified on Sun 30 Sep

2018 11.34 EDT

‘If your social reputation in that milieu is all you’ve

got, you’ve got to defend it.’ Photograph: Lorenzo

Rossi/Alamy

A17-year-old boy shoots a 15-year-old stranger to

death, apparently believing that the victim had

given him a dirty look. A Chicago man stabs

his stepfather in a fight over whether his entry into his parents’ house without knocking

was disrespectful. A San Francisco UPS employee guns down three of his co-workers,

then turns his weapon on himself, seemingly as a response to minor slights.

These killings may seem unrelated – but they are only a few recent examples of the

kind of crime that demonstrates a surprising link between homicide and inequality.

While on the surface, the disputes that triggered these deaths seem trivial – each

involved apparently small disagreements and a sense of being seen as inferior and

unworthy of respect – research suggests that inequality raises the stakes of fights for

status among men.

The connection is so strong that, according to the World Bank, a simple measure of

inequality predicts about half of the variance in murder rates between American states

and between countries around the world. When inequality is high and strips large

numbers of men of the usual markers of status – like a good job and the ability to

support a family – matters of respect and disrespect loom disproportionately.

Inequality predicts homicide rates “better than any other variable”, says Martin Daly,

professor emeritus of psychology and neuroscience at McMaster University in Ontario

and author of Killing the Competition: Economic Inequality and Homicide.

This includes factors like rates of gun ownership (which also rise when inequality does)

and cultural traits like placing more emphasis on “honor” (this, too, turns out to be linked

with inequality). “About 60 [academic] papers show that a very common result of greater

inequality is more violence, usually measured by homicide rates,” says Richard

Wilkinson, author of The Spirit Level and co-founder of the Equality Trust.

According to the FBI, just over half of murders in which the precipitating circumstances

were known were set off by what is called the “other argument” – not a robbery, a love

triangle, drugs, domestic violence or money, but simply the sense that someone had

been dissed.

When someone bumps into someone on the dance floor, looks too long at someone

else’s girlfriend or makes an insulting remark, it doesn’t threaten the self-respect of

people who have other types of status the way it can when you feel this is your only

source of value.

“If your social reputation in that milieu is all you’ve got, you’ve got to defend it,” says

Daly. “Inequality makes these confrontations more fraught because there’s much more

at stake when there are winners and losers and you can see that you are on track to be

one of the losers.”

Harold Pollack, co-director of the University of Chicago Crime Lab, agrees. “If you

foreclose [mainstream] opportunities for respect, status and personal advancement,

people will find other ways to pursue those things.”

Obviously, potential murderers don’t check the local Gini Index – the most commonly

used measure of inequality that looks at how wealth is distributed – before deciding

whether to get a gun. But they are keenly attuned to their own level of status in society

and whether it allows them to get what they need to live a decent life. If they can’t, while

others visibly bask in luxury that seems both impossible to attain and unfairly won, those

far from the top often become desperate.

Issues of respect don’t only affect males, of course – but overwhelmingly, murders tend

to be committed by men: the current proportion in the US is 90%.

What’s less known is that in most countries, most of the victims are male, too. That’s

because, since inequality is common worldwide, killings related to status predominate –

and men kill those whom they see as rivals. Murders are also disproportionately a crime

of the young. For both evolutionary and cultural reasons, social status is most highly

contested during adolescence and early adulthood, because high rank

is frequently associated with sexual attractiveness.

The link between these crimes and inequality is also underscored by how much their

levels differ between countries. “It’s the most variable component of the homicide rate,”

says Daly.

All types of homicide are much less common in the egalitarian Scandinavian countries

than in the US. But disputes over male status are so much lower in such countries that

while in the US, 77% of victims are male, only 50% are in the Nordic nations.

“What’s fallen out is all this male macho stuff,” Daly says. Although inequality can also

affect rates of crimes like robbery or burglary, its effect is most clearly seen in the way it

murderously magnifies beefs.

The recent, stunning rise in inequality in America started in 1979, with the top

1% capturing 54% of all the increase in income between that year and 2007. While the

Great Recession briefly paused the trend, between 2009 and 2013, the 1% took 85% of

income growth and the situation has only worsened since. During that time,

however, homicide rates showed nearly the opposite pattern: they rose through the

1960s and 1970s, reached a peak in 1991 and fell by nearly half between that year and

2015.

The last two years, however, have seen some rises: the rate in 2016 was nearly 9%

higher than in 2015 and 2017 also seems likely to show a jump. Daly says that no one

knows what time lag to expect between a rise in inequality and a rise in murder – but if it

does take a few decades, this could be the start of a troubling trend, not a blip.

The rise of Trump shows that “inequality has a real tangible effect on voter behavior,

just not necessarily what you’d expect”, says the Stanford historian Walter Scheidel, the

author of The Great Leveler: Violence and the History of Inequality from the Stone Age

to the Twenty-First Century. Scheidel’s book shows that historically, the only way high

inequality has been flattened has been through catastrophe: disease, famine, world war,

societal collapse or communist revolution.

Extended breastfeeding linked to higher IQ and income in study

By Sandee LaMotte, special to CNN

Updated 11:37 AM ET, Thu March 19, 2015 | Video Source: CNN

Long-term study finds that IQ at age 30 was nearly 4 points higher for babies breastfed for a year or

more

Study conducted in Brazil also associates longer breastfeeding with higher income and education levels

Critic points out that the study doesn't account for other possible contributing factors

(CNN)"Breast is best" -- you could call it a mantra of sorts that sums up much of today's research on

breastfeeding.

Not only does breastfeeding have clear short-term benefits, such as protection from infectious diseases

and a reduction in mortality, it's also been shown to be associated with an increase in intelligence.

Prior studies have shown an increase of up to 7.5 IQ points in elementary age children who were

breastfed, as well as an increase in verbal, performance and comprehensive IQ in adults.

The latest addition to this perspective is a long-term study of infants born in Pelotas, Brazil, in 1982.

Published in Lancet, the study interviewed 5,914 new mothers about their plans for breastfeeding and

then followed up to see how they did.

"Information on breastfeeding duration was collected very close to the time when weaning happened,

so we had a very precise information on the duration of breastfeeding," said study author, Dr. Bernardo

Lessa Horta, in a podcast on Lancet.

What makes this study unique is that it followed the subjects all the way to age 30.

"We were able to follow about 68% of the participants, which is a very good follow-up rate," said Lessa

Horta. "We observed that breastfeeding was positively associated with performance and intelligence at

30 years old, as well as with education, school achievement and higher monthly incomes."

In fact, Lessa Horta said the subjects who had been breastfed for 12 months or longer had a higher IQ

(about 3.7 points), more years of education and earned roughly 20% more than the average income

level.

"It's suggesting that the positive effect of breastfeeding on IQ leads to a higher income," he said. "This is

our main finding at this moment."

One possible reason for the advantage of breast milk, Lessa Horta added, is that it is "rich in long-chain

polyunsaturated fatty acids which are important to brain growth and development." Called LCPUFA for

short, these essential fatty acids are found in salmon and shellfish and have been added to infant

formulas since the 1990s. However, the benefit to mental or psychomotor development from adding

LCPUFA to infant formula is unclear.

Because the study did not measure home life, intellectual stimulation or bonding between mother and

child, it was not able to tease out whether these factors may have also contributed to the increase in IQ.

That leaves it open to critics, such as Texas A&M Professor Joan Wolf, author of "Is Breast Best?

"This study does not address the very real possibility that mothers who choose to breastfeed, regardless

of income or education, distinguish themselves from those who bottle-feed in all kinds of ways that are

likely to promote intelligence," Wolf wrote CNN.

For Lessa Horta, the implications of his study are clear: "The finding supports the promotion of

breastfeeding. It's more evidence that besides the clear short term benefits, breastfeeding also has long

term consequences in terms of human potential."

https://www.abc.net.au/triplej/programs/hack/ethiopian-garment-workers-are-being-paid-worlds-lowest-

wages/11098232?smid=Page:%20ABC%20News-

Facebook_Organic&WT.tsrc=Facebook_Organic&sf212453237=1&fbclid=IwAR3Jn7geRmyv34znb41V_yKIMRUIckrky-

2grdMQ5eeOk1A2Dn4JesqYlSU

THURSDAY 9 MAY 2019 5:52PM

By James Purtill

$26 a month: Ethiopians are being paid world's lowest wages to make your Calvin Kleins

Ethiopia is trying to become the new Bangladesh of garment factory labour by promising the

lowest wages in the world, but the workers themselves report they're struggling to survive on US$26 a month while

stitching clothes for Calvin Klein, H&M and other brands.

A study from New York University's Stern Center for Business and Human Rights, released this week, tells an old

story: the hidden cost of the fashion industry.

It's also a classic story of neoliberal economic development, one that's been played out countless times since the

1990s: An impoverished country seeks foreign investment by declaring itself 'open for business', and offers up a

vast and willing labour force.

Global capital, forever scouring the world for a competitive advantage, sets up shop: Factories are built, and young

uneducated women are recruited from agricultural villages.

In 2015-16, Ethiopia built the state-owned Hawassa Industrial Park, located 140 miles south of the capital of Addis

Ababa. The park currently has 25,000 employees producing garments for global brands also including Levi's, Guess,

and Tommy Hilfiger.

An Ethiopian government brochure for potential foreign investors advertised: "Cheap and skilled labor: 1/7 of China

and 1/2 of Bangladesh."

In fact, the labour would be even cheaper: Workers are being paid $26 a month, almost a quarter of the $95 a

month minimum wage in Bangladesh.

Supplied: Stern Centre

The government based this figure, which was then factored into business plans, on the amount it paid its own floor

sweepers - as the report points out, this is an unfair and arbitrary comparison for sewing-machine operators

employed by foreign manufacturers.

Some workers told the authors of the report the government-employed job screeners sent to small towns and

villages promised considerably more than $26 a month.

"I thought the salary would be much higher," one worker said.

"I was not told the truth."

Meanwhile, the influx of workers has driven up the cost of accommodation. A single bare room within a few

kilometres of the park costs about $52 a month.

The report states: "One young woman showed us the concrete ground-floor room she and three fellow workers

rent from a homeowner. There is no toilet, only an open-air latrine nearby. The woman said she and her

roommates work different shifts, and she'd had some of her belongings stolen. Sometimes, she added, there is no

food left for her when she returns from the factory. All four women sleep on thin mattresses on the floor, and

when it rains, water seeps into the living space. We heard from others at the park that some employers hand out

plastic sheets, which employees place between their mattresses and the concrete floor in an attempt to stay dry."

An October 2017 survey told of workers fainting from hunger, as well as "being too tired from walking three hours a

day to come to work and to go back home [and] the lack of energy and fainting due to the workers not eating

properly because they cannot afford to eat two meals per day."

'It's okay to be a little bit late to work'

Workers coming from family farms struggled to adjust to an economic system within which they were considered

units of labour, and which was geared towards efficiency and production: "Unfamiliar with industrial custom, they

don't understand why they would be disciplined for lateness, absenteeism, or chatting with workstation neighbors

at the expense of completing their sewing tasks - all behaviors that might be acceptable in a family-agricultural

setting."

"A significant percentage of workers said they did not believe there would be problems for the factory if they

missed working days and also said that they believe it is okay to be a little bit late to work."

"Frustration over their pay, combined with homesickness and other unfavorable aspects of factory life, has led to a

sense of alienation and lack of commitment to working productively."

And so they quit.

During its first year of operation in 2017-2018, overall attrition hovered around 100 per cent, meaning that, on

average, factories were replacing all of their workers every 12 months.

Some factories have been running at 15 per cent efficiency.

<<<Hawassa industrial park.

Supplied: Enterprise Partners

Hawassa employees.>>>

Supplied: Enterprise Partners

The Stern Center study does not accuse the brands of using sweatshop labour: "Ceilings are high, lights bright, and

ventilation more than adequate."

Indeed, Ethiopia hoped to shift manufacturing away from Bangladesh with its lax building safety standards: "The

Rana Plaza disaster, a factory collapse that killed more than 1,100 people in Bangladesh in April 2013, reinforced

PVH's determination to start anew in Africa," the study says.

PVH was among the first to move. The US-based company is one of the world's largest apparel chains, with labels

such as Calvin Klein, Izod and Tommy Hilfiger, and operates more than 2,000 factories in more than 40 countries. It

has an annual revenue of $9.7 billion.

Instead of sweatshops, the story of the Ethiopian garment industry is more mundane and perhaps disconcerting:

It's the logical result of a system that rewards enormously wealthy companies to seek out the cheapest source of

manufacturing.

Staggeringly low wages was the reason brands came to Ethiopia, but the global investment has not translated into

prosperity for the employees.

'Generational sacrifice' to build industrial base

Backers of the industrial park say some degree of "generational sacrifice" needs to take place in Ethiopia as the

country develops economically.

They say today's workers likely will have to endure exceptionally low wages while they accumulate industrial skills

and achieve productivity levels that in the future will bring them, and their children, higher pay and better

circumstances.

This has happened in China, which started with t-shirts in the 1990s, and has now built a prolific apparel sector. The

country eventually diversified into manufacturing other goods, like mobile phones. Its success is one reason

companies are going elsewhere for cheap labour.

But there's another scenario: Ethiopia could become a permanent pool of cheap labour; in Bangladesh, workers'

wages have not greatly increased in three decades.

Dr Arkebe Oqubay, special economic adviser to the prime minister and architect of the Hawassa Industrial Park

strategy, estimated that it would take 15 to 30 years for the country's workforce to acclimate itself fully to the

global garment industry.

"Pace is critical," he told the authors of the study.

"We need to improve before [foreign] firms become frustrated."

Credits

Author James Purtill

http://www.messynessychic.com/2016/05/13/desire-to-kill-the-

streetcar/?utm_source=sendicate&utm_medium=email&utm_campaign=2016-05-16+A+weekly+newsletter+from+Paris/

Desire to Kill the Streetcar

By MessyNessy, 13TH MAY, 2016

In the 1920 and 30s, Los Angeles, Philadelphia, Boston, Seattle and countless other major American

cities had sprawling electric streetcar rail systems until General Motors, Standard Oil, Phillips Petroleum

and Firestone bought up a controlling interest in National City Lines. Once the monopolising companies

owned the railways, they shut them down, forcing Americans to buy cars or ride GM-manufactured

buses, fuelled with Standard Oil and Phillips Petroleum, and fitted with Firestone tyres. This deliberate

campaign to kill the electric-powered streetcars is known as the General Motors conspiracy.

The full story didn’t become public knowledge until a Harvard Law began investigating the conspiracy in

the seventies and took it all the way to the Senate. During the hearings, which brought forward the

proposal to restructure the automobile, truck, bus, and rail industries, General Motors was described as

‘a sovereign economic state’ and affirmed that the company played a major role in the displacement of

rail and bus transportation by buses and trucks.

“When National City Lines would acquire a transit system, the trolley rails would be ripped up, the

overhead wires would be cut down, and the system would be converted to buses within 90 days.” –

Brooklyn Historical Railway Association.

By the time the Justice Department caught wind of what was going on, National City Lines had already

acquired and taken control of 46 transit network lines. In 1946, nine corporations were indicted in

federal district court, accused of “conspiring to acquire control of a number of transit companies,

forming a transportation monopoly” and “conspiring to monopolize sales of buses and supplies to

companies owned by National City Lines”.

Five corporations, including GM and the usual suspects, were convicted of conspiring to monopolize the

sale of buses and related products to local transit companies controlled by NCL; but were acquitted of

conspiring to monopolize the ownership of these companies. General Motors was fined $5,000 and GM

treasurer H.C. Grossman was fined $1.

But by then it was too late and American cities and suburbs had already bought into car culture. After

buying up streetcar companies all over the countryIt had only taken the alleged monopolists less than

two decades to replace the system with their own products.

The General Motors conspiracy is also frequently dismissed however, claiming the corporations’ did

nothing that wasn’t already happening to a bankrupt system which was already being dismantled across

the country.

An in-depth Vox article on the subject points out that “while it’s true that National City continued

ripping up lines and replacing them with buses — and that, long-term, GM benefited from the decline of

mass transit — it’s very hard to argue that National City killed the streetcar on its own.”

So General Motors just put the nail in the coffin, finished off the job, fired the fatal bullet and put it out

of its misery, right? Even if GM financially benefited longterm from ensuring the demise of an

environmentally friendly transit system and replaced it with a gas-guzzling car-dependent culture– who

believes in global warming anyway?

Sources: Water and Power, Eric Brown, Museum of the City/ Suggested further reading here.

https://www.theguardian.com/us-news/2018/may/07/gofundme-crowdfunding-essential-america-safety-net

Go fund yourself: crowdfunding is now an essential part of America's safety net

In the past, local activists may have turned to elected officials to raise funds, but now

they rely on crowdfunding sites to pay for basics – including school lunches

Alissa Quart

Mon 7 May 2018 06.00 EDTLast modified on Mon 7 May 2018 11.01 EDT

Annie Hanshew turned to GoFundMe to raise $100,000 for families who hadn’t paid for

school meals and were facing collections. Photograph: Alamy Stock Photo

For years, Annie Hanshew has wanted things to change in her hometown of Helena,

Montana – she even ran for the local school board. But her activism came to a head

when she found out in April that a collection agency planned to squeeze more than

$100,000 from families who hadn’t paid for school meals, Hanshew, 36, felt she had to

take strong action, especially after she discovered, to her horror, that school district

officials hadn’t been tracking which student debtors actually qualified for either free or

reduced lunch: she knew that this move would further burden area low-income families.

In the past, a local activist like Hanshew might have simply called their school board or

complained to an elected official and Hanshew and other people did do the latter. But

these are dark times, filled with distrust for efficacy of the established order. So

Hanshew then reached for the authority many Americans have resorted to as of late

when confronted by an emergency or a personal tragedy: GoFundMe.

Her GoFundMe campaign has so far earned $4,545 out of Hanshew’s $100,000 ask.

A press release from GoFundMe in 2017 estimated that its platform raised $33.8m to

pay for school room basics

Hanshew chose the platform for a reason: citizens in Seattle and Fargo had already

used it to raise money for school lunches in their community. There are also dozens of

school lunch-specific campaigns on the site, so that kids with unpaid meal accounts are

not “lunch shamed” in places like Richmond, Texas. Indeed, since GoFundMe started in

2010, there have been tens of thousands of campaigns to support K-12 teachers: a

press release from the company in 2017 estimated that its platform raised $33.8m to

pay for school room basics.

Crowdfunding companies like GoFundMe are in themselves not evil. But the fact that

we have to rely on them to pay for our basics is. That schools and their defenders need

to raise money for things like lunches is an outrage. People have paid their taxes. Why

were these meals not simply provided gratis to kids from struggling families?

Here’s why. Our social fabric is sundered. GoFundMe and the other crowdfunding sites

that have proliferated since 2010 are an example of what has sprung up in its place,

what I have called America’s dystopian social net. That is, we now require private

solutions to what are public problems.

We needn’t wait for the negative futures promised by sci-fi films such as Mad Max or

The Hunger Games, where the wealthy live in luxurious places and the rest of us dwell

in a rotting world ruled by an antagonistic government. This bleak future is here now,

and exists in tableau after tableau on charity crowdfunding sites.

These campaigns form a frightening archive of America’s failings. There are calls for

help relieving healthcare-related debt and shortfalls, victim’s compensation or for gun

violence victims. As one campaign put it: “Matt was shot in the chest and had to

undergo surgery late last night to remove part of his lung … I know the medical bills will

be piling up soon.” Healthcare is another thing, of course, that I believe civilization

should pay for and it seems dreadful that each of these pity stories should be pitted

against each other, a veritable Fight Club or battle royale of misery. Read together, it’s a

catalogue of despair that also can represent the redirection of our social rage to penny-

ante altruism.

In particular, the requests for payments for health or IVF treatments are unabashedly

plaintive, their authors willing (and perhaps desperate) to expose their illnesses and

suffering to whoever will read on. The site also encourages something I think of as “sob

story-ism” or, to quote the famous Russian saying, the worse the better. This is not just

my lit crit interpretation. The GoFundMe site lays it out pretty clearly, offering

campaigners “tips” for writing a “A great campaign Story” (capitals theirs). That story,

they say, “will outline your cause clearly, in a way that is engaging to read … all while

speaking from the heart”.

In 2017, crowdfunding scholar Daren C Brabham wrote in a paper in the journal New

Media & Society (he had previously published online) that there is “no surprise that the

same language used to puff up crowdfunding as a democratizing force in the media

bears a striking resemblance to the free-market economic arguments used by political

groups on the right to justify stripping the NEA and other organizations of public

funding”.

Brabham’s case studies were online fundraising for the arts. But his words pertain to

school-oriented campaigns as well, as classrooms are also turning into DIY efforts,

sticky-taped together, more Etsy than the US Department of Education.

That’s not to say that GoFundMe and the like can’t offer moments of inspiration.

Hanshew, after all, is a woman who simply hates to see poor families as well as

teachers shell out some of their meager salaries to pay their students’ lunch debt, and

knows two teachers who have attempted to do just that, offering to put me in touch with

them. (One of them was Melissa Romano, Montana’s teacher of the year.)

If anything, Hanshew’s good citizenship should serve as a model.

To me, though, the need for these efforts is a symptom of a whole generation of parents

under siege – overworked and haunted by debt, abandoned by existing structures and

unable to pay for anything extra for their kids.

Even the lucky campaigns tend to point out societal gaps and prejudices, too.

As Hanshew sees it: “In a perfect world, kids would just get meals without means

testing. It’s never going to happen in Montana and the fact that we have to fundraise to

make up the difference is bad, but I am so used to this reality that I can’t imagine

change.”

The Helena public schools ultimately decided, at least partially due to the pushback

from the community and the public GoFundMe campaign, to forgive the lunch debt of

families that have demonstrated eligibility for free lunches. Of course, that still didn’t

cover the children of working-class families whose kids were free lunch ineligible yet

struggled to pay for the meals.

Meanwhile, Hanshew has also come to recognize that GoFundMe, while a great outlet

for her and others in the community, hasn’t been the most effective tool due to the fees

– the crowdfunding site has been taking money off the top of her campaign’s donations

and they aren’t tax deductible. For this reason, Hanshew is looking into a new way to

cover school lunch debt. It’s – what else – founding, with teacher Romano, her own

non-profit.