On Thursday, this headline caught my eye:
Let that sink in for a moment. People in this country, most of them in their late teens or early twenties, borrowed over one-fifth of a trillion dollars. That money went into the pockets of educational enterprises (with fat administrative salaries, tenured professor paychecks, and God knows what else). The people who borrowed the money blew off the debts. And now those stupid enough to be responsible are stuck holding the bag.
This is the very embodiment of moral hazard.
Look, the country is doomed anyway, so I’m not here to shake my head about that. This piece is really more of an observation – – and it isn’t the first time I’ve made this particular one – – about how these faux-prosperous times have made society, and its government, very forgiving.
We look the other way. We let bygones be bygones. We feel pity for those not paying their bills. We figure it’s all for the best.
Just take one look at the amount of student debt is in the hands of the federal government……………good time to be in the educational biz, ain’t it?
My theory is that if we were, say, in the throes of an honest-to-God recession, there would be no such forgiveness program. You borrowed the money, you pay it back, sucker. End of story.
Now some of you may say, “Hold on a second, in the financial crisis, there were trillions of dollars of bailouts, and plenty of forgiveness. What about that?” And you would be absolutely right. But that’s what created this situation in the first place. If, in 2008/2009, Goldman Sachs went bankrupt, Lloyd Blankfein went to prison for life, and Richard Fuld was publicly executed, we wouldn’t have the mentality we do today. But we do.
Hearts are bleeding now, and hell, all the Fed has to do is create however many trillions of fake dollars they want, and all the bills are going to get paid anyway.
But just think about the kinds of high profile cases that have been going on lately. The shameless business criminal Michael Milken was just let off the hook by Trump (incidentally, if you want to read about his crimes, I cannot recommend the book Den of Thieves highly enough):
Bubble-headed college admissions fraudster Olivia Jade is awaiting the fate of her parents (Lori Loughlin and her chinless husband), who scammed her into USC:
And old-fashioned romantic Harvey Weinstein (seen here in a hilarious attempt to garner pity by hobbling around with a walker they apparently snatched from a Goodwill store) should be getting the guilty/not guilty in the first of many trials within hours or days from now.
In more normal times, every one of these people would have been hung up by their heels Mussolini-style. But after nearly a dozen years of QE, free money from the Fed, countless trillions sprinkled onto the public (well, at least the richest among us), the human race is in a terribly sweet and forgiving mood.
When the day comes that the shit hits the fan, and reality comes back, I can assure you of one thing: you’re not going to want to be in the shoes of anyone in the public eye who is seen as a wrongdoer, because John Q. Public is going to be pissed off and out for blood.
At the moment, the bad guys are getting treated with kid gloves – – – -and this includes the countless millions who are going to be forgiven for their hundreds of billions in student loans, while the rest of us are expected to pay ours. So get back to work and pay those taxes. We’re all counting on you.