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Comment: Bankrupty doesn't discharge them (Score 5, Informative) 1032 1032

The major problem with student loans is that there is no longer any escape from them. Bankruptcy does not discharge them. You're stuck with them for life.

That is a major departure from traditional debt laws, and this is just wrong. People should be able to escape their mistakes after appropriate penalties.

A student, 18 years in age, cannot comprehend the gravity of the loans they are taking out. The whole situation is rotten: you are told that you MUST get a college degree, otherwise you will be a lifelong failure. You are told that IF you get a college degree, your future WILL be rosy and bright. You are told that ONCE you get a college degree, you WILL get a good job and then paying the loan off will be no problem.

That is the extent of your knowledge when you are 18. You have no idea how much your salary will be in four years, in fact, when you are 18, it is very likely you don't even know how much your parents make, or how much anyone makes beyond your knowledge of minimum wage. All you know is that you have to go to college and get that degree so you can get a good job. At least that is what my parents told me, and when I was in college, that is the same set of assumptions that everyone was operating under.

And once you get that degree and you can't get a job in your chosen field of study, or maybe you don't even get that degree (because a lot of people don't make it through college - many college programs, particularly engineering, are actually DESIGNED to weed people out), then you are sitting there with a stack of loans and no way to reasonably pay them off.

Prior to 2001, you could try to pay them for a while, but after finding that you were getting deeper and deeper in debt, you could take a deep breath, assess your situation, and then take your lumps in the form of bankruptcy - knowing that you would have a finite period of time in which you would be penalized by a bad credit rating. But at some point it would be over.

In 2001, congress changed the law to eliminate the discharge of student loans from bankruptcy. Any other financial failure is redeemable, but a decision that you made when you are 18 years old, a failure that is not easily foreseeable (because people don't know their capacity, people don't know their future earning potential, people don't know what the job market is going to do), is not forgivable. Never, until the day you die, and even then, your estate will be on the hook for them.

And the loan companies are given extraordinary power, backed by the government, to collect their debts. Hey, if someone owes me money, I can't attach someone's tax returns - but student loan companies can do this. It is also very hard for me to garnish someone's wages to collect a debt because there is always the threat that the person will file bankruptcy. The lack of that threat here gives student loans extraordinary power.

That is the problem here, and it will take people like Lee Siegel, doing what he did, to bring this to the forefront of discussion. Certainly any abuse of the student loan process should be curbed, but an iron shackle on everyone is not the right response to any potential abuse.

Comment: Re:Shouldn't this be obvious? (Score 1) 150 150

Here's something that many people don't realize; children need more parental support today than they did 25 years ago. I see what my kids have to do in school, and there is so much more learning that takes place outside of the school. Projects, independent reading, and between 5-10 hours of homework per week.

That is a great-unequalizer between good families and bad families. At least when most of the learning was done in school, the results depended on the kids' willingness to learn. By extending the reach backward into the home, it makes more kids fail because their families are not capable of providing such support.

Think back to when immigrant families had 10-12 kids and they all went to the local public school. Do you think a mother, illiterate in English, helped each of those 10 children with homework? No way. But they still all did good because they didn't need parental support to learn. They also had superior teachers in the form of all the talented women who were prevented from working in engineering, finance, science, marketing, and business. We have compensated for a general downshift in the talent of the teacher pool by loading more work onto families, and when the families can't provide this, the kids fail.

Comment: Re:Unite! (Score 1) 614 614

We at least need to put the idea out there and get people thinking about it. It doesn't have to go as far as unionizing, but when your company tells 300 people that they are being laid off in 3 months, and that they have to spend those three months training their replacements, those 300 people should immediately unite and say "no thanks, we're all going to quit tomorrow instead". They're gone no matter what, so might as well suck it up and take your medicine now instead of in 3 months.

I worked at a consulting company which was being bought out. They brought out a document that they wanted everyone to sign, it was a very restrictive non-compete. It took very little organizing to get about a dozen (half) the people to say "we're not signing this" because we knew that we were an important piece of what was being bought. The company tried to threaten everyone, but eventually backed down and made the document less onerous.

Strength in numbers.

Comment: Unite! (Score 1) 614 614

If the workers who were laid off united, this strategy would not work. Simply refuse to train the replacements. That would be severely damaging to their operations. I know that many people can't afford to give up their severance, but when workers take this kind of crap with barely a whimper, that makes it a successful management strategy.

Comment: Re:Countries can demand fair taxes (Score 1) 312 312

That is where I think the entire tax discussion has gone wrong. We focused on on trying to collect the most tax revenue by lowering the rate, but I think that lowering the rate reduced inefficient spending - and inefficient spending is almost like a private form of economic stimulus.

Although the government certainly needs money, full employment is better than government tax collection and then transfer payments. People would rather work, they would rather feel like they are doing something worthwhile.

If a business owner is going to lose 90 cents to the government via a high top tax bracket, he will probably hire someone to wash his windows every week because that is of more utility than the 10 cents on the dollar he will earn. He will get that benefit, and the window washer will be able to practice his trade. That's better than trying to squeeze a few more percentage points out of the business owner and simply give it to the unemployed window washer, who feels like crap because he has nothing to do all day.

Although the spending won't be 100% efficient, it is likely better than what is happening now, which is that the wealthy are accumulating the profits and are spending them on things that primarily increase their wealth - such as funding politicians, expanding capacity overseas, or speculating on natural resources - and poor people are scraping by.

Comment: Re:Countries can demand fair taxes (Score 1) 312 312

Well, for one it would be very hard to implement a net revenue tax in a progressive way. Someone selling cars would get hammered versus someone selling accounting services even if both had the same amount of profit.

However there is one thing that we really should think about regarding taxing net revenue - the fact that without deductability of any expenses, this would cause businesses to not generate expenses. Seriously. I run a small business, and it definitely plays into my mind when I purchase something, I say to myself "well, I can pay 35% of that dollar to the government, or I can buy something that I may not vitally need, but I'll try it out".

I think that businesses have gotten tighter with their spending ever since taxes on both corporations and owners have been lowered. If you're a business owner that makes doors, for example, and you can save $3m per year by shipping your factory to Mexico, but it is 1975 and you will pay 70% of that $3m to the government, then it probably isn't worth the grief. But what if the tax rate was 0%? That makes the pot of money bigger, and the pursuit of inefficiencies would be ruthless.

Comment: Re:Countries can demand fair taxes (Score 4, Interesting) 312 312

I believe that this is the law. The trick is defining "earnings". Earnings implies gross revenue minus operating expenses.

Let's say a multinational corporation operates in the USA (30% tax rate) and in the Cayman Islands (1% tax rate). Call them Foogle. They get 99.99% of their revenue from the USA, and 0.01 from the Cayman Islands. However they have a subsidiary, also based in the Cayman Islands, and they "license" the intellectual property for their company from this Cayman Island corporation for an amount precisely equal to the amount of their global revenue.

So in the USA, they show zero "earnings" (profits) and in the Cayman Islands, they show a ton of earnings (profits). So they pay 1% tax to the Cayman Islands and 0% to the USA.

That is the type of game they play. And when the laws get written to tighten that up, they just play more complex games.

If you try and tax corporations on their gross revenue, you will make a lot of activities unprofitable. For example, if you are a bookstore and you sell $10m worth of books for a profit of $100k, and you now have to pay 5% tax on the $10m instead of 30% on the $100k, you will now owe more 5x more in taxes than you have in profits.

Comment: Training, not college (Score 3, Insightful) 85 85

I'm not sure if the people who try things like this are stupid, or think that everyone else is stupid.

College is not the equivalent of training. It is an experience that transforms people during a period of time when they are still able to be transformed. Some of that is about learning specific things that you will need later. A lot more is about the ability to train yourself to learn specific things that you may never need later - so the training is the valuable thing, not the knowledge. More is about learning how to take on experiences, but in a sandbox environment, trying things that you could not easily do elsewhere. Getting involved in clubs and activities. Being a DJ on a radio station. Learning how to live with others in close quarters. Learning how to both succeed and to fail.

Coupled with that is the exposure to people who are not you. Creatively mixing your thoughts with others in a relaxed, informal setting. Broadening your horizons. Still in a sandbox though, because you're going to screw up. You're going to piss people off. You're going to make mistakes.

I still remember the lesson I learned in my "contract negotiation" class, when my negotiating team was up against a team made up mostly of hockey players. My team, representing "labor", with one older guy on it who probably was in a union, decided that it would be a good strategy to play hardball with the other team ("management") because the older guy surmised that the hockey players could not afford to come to a stalemate because a failing grade would bounce them off the team. The strategy worked, but I was disgusted with the tactic, so I wrote a paper outlining the problems with this negotiating approach.

That sandbox is the part of college that is the most expensive. I'd guess that it costs more than half of the entire cost of the "education". That means this for-profit company is trying to take advantage of people who naively believe that "college" is just about a credential, a piece of paper that says you met a minimum set of requirements. An online "college" can not offer most of what a campus-based college offers. It can only offer the "training" part, plus maybe a little of the "learning how to learn" part.

Comment: Re:Technology can NOT eliminate work. (Score 1) 389 389

While costs have come down on some things once production has been mechanized, costs in general haven't come way, way down. Although I can buy a DVD player for 1/10 of what I could 20 years ago, my health care is 10x more expensive. We have less of a middle-class than we once did, and poverty is increasing.

Food may not be as expensive as it was 30 years ago, but we still have a substantial number of working people who can't afford it. Do you have any examples of things that have dropped in price so much that they went from an expensive commodity to something anyone can afford as an afterthought? The only thing that comes to mind is long distance phone calling.

Comment: Re:Technology can NOT eliminate work. (Score 1) 389 389

Rather than shortening the workweek so my a better idea to move the retirement age forward. You go to school as normal, then work full time for ten years, save enough money that you can live off the interest/afford your own robot whatever to make you passive income, and retire around 30.

That is a more difficult way to do things because it either presumes that people are going to magically get really good at long-term planning/saving, or it presumes that we will enact a social insurance system that will cost a lot more while people are working so they will not starve once they are not. Neither seem plausible based on history.

I think that people need productive things to do in some way, shape, or form. I see my retired father who genuinely seems bored, especially in the winter when he can't golf. He's not the type who would volunteer at a day care or try and invent something in his spare time. Don't get me wrong - he's glad to be retired after nearly 50 years of working a physically demanding job, but I think he would have gone crazy if he had stopped when he was 50 years old.

Shortening the time we are mandated/expected to work would work better. This used to be the case in the form of longer vacations based on your years of service. The economy doesn't work like that anymore, people don't put in 30 years at the same company and accrue 6 weeks of vacation. They move around and start their seniority-based vacation from scratch every 5-10 years - and few companies give out 6+ weeks anymore anyway, it's more like 2-3.

I would love to see a work culture where hours could be more flexible. For example, I'd love to be able to say "this year, I would like to take 10 weeks off because I have young children, but in a few years I won't have as many demands so maybe I'll only take off 3". There is no formal mechanism for that, and if you informally ask it of your employer, your professional reputation will be tarnished. I asked to go part-time when my first child was born - I wanted to take off every other Friday, basically a "90%" schedule. I was told "no" in no uncertain terms. Not possible. And I work for a decent-sized company.

There are three major stumbling blocks that keep people tied to their jobs: healthcare, retirement and college education for their kids. If I knew that my retirement was secure and that my kids would not have to pay for college, I might consider working less or pursuing something different (but less lucrative or maybe more risky). Those are really big important expenses to have to worry about though.

Comment: Turnabout is fair play (Score 1, Insightful) 79 79

If corporate America can offshore the production of its goods to China, displacing US workers, but continuing to keep prices high, then I see this as a fair and just response to that. Cut out the middlemen, it is good for the US consumer, and that's all that matters, right? Just like global trade.

Comment: Re:Tell me it ain't so, Elon! (Score 1) 181 181

That's almost a convincing argument, but you missed something - a corporate store means a complete monopoly on the product, and the price is 100% fixed. Think: Apple.

That does not mirror a grocery store. Sure, the price of a can of beans is fixed, but only at that store. If you don't like the price for that exact can of beans, you can try several others, and often can do better.

I do get your point about the secrecy though - although for the most part, even though prices are openly posted everywhere, they are de-facto secret because you can't get the information. You don't know how much a can of beans costs at all stores right now. You don't know how much I paid for it yesterday. It's still secretive, though open.

Comment: Re:Tell me it ain't so, Elon! (Score 1) 181 181

That's one way to look at it - though characterizing it as "rip-off" because he wasn't charitable enough to subsidize people's gas seems a little antagonistic. Perhaps you didn't read where I wrote that Texaco charged him more for gas (i.e. the wholesale level) than it charged its retail customers. He took the risk by pioneering the market, they later came in and undercut him once it was established. That is the corporate way.

"There is such a fine line between genius and stupidity." - David St. Hubbins, "Spinal Tap"

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