Unprepared high school students buried in debt

I read some articles recently in Bloomberg and on AP about the sad inadequacy of American high school students.  They are woefully unprepared for college. 

"A recent study issued by ACT Inc., a testing organization measuring “college readiness,” found that less than one-third of graduating high-school seniors met benchmark standards for science, and a majority failed to meet them for math. Even in English and reading, a large minority of students were below a level that would mostly earn a grade of C or better in college-level work" .Bloomberg.com Sept. 11, 2012.

This lamentable fact, coupled with the crescendo of calls for relief from the towering burden of student loan debt imply some serious problems for American participation in the world economy. 

Kids coming out of college today, buried in 100,000.00 of student loan debt, are unwittingly entering into servitude to student loan servicers.  The debt incurred by students is remarkably non-dischargeable in bankruptcy.  How is it that a company like Lehman Brothers, or Enron, that can financially ruin the lives of millions, can discharge its debt to all of its employees and other debt holders, with its officers walking away Scot free, without obligation to anyone, but a struggling film appreciaton graduate has to pay back their 50k student loan with interest, no matter how long it takes. 

It's true, even borrowers, or their cosigners, (read grandparents) are paying back student loans via forced deductions from social security payments.  Social security!

Hmm.  Let's see.  Schools and lenders urge kids to go to college to get a degree so that they can make more money, or be better workers.  The schools make it easy by putting financial aid sales people on staff.  The lenders get huge amounts of information from parents who want their kids to get the hallowed degree and will do what they have to do to get financing.  Then the kids and the parents fund the overpriced, OVERVALUED, product by borrowing against their hoped for but truly speculative future earnings.  It is an echo of the mortgage debt scam of the early 2000s, but more sinister.  Remember, the incurred debt is not dischargeable in bankruptcy except in very rare circumstances. 

We owe our kids better.  We owe ourselves better.  High cost "higher" education for the sake of merely getting a degree is a bad investment.  It is a loser from the first day of class. 

Phones at the gym are stupid

I like my smartphone. It's a Samsung Galaxy S II. It works well, and one of its finer features is that it is not an Iphone. Like most who carry one, it goes with me everywhere. I draw the line at the gym though and scoff at those who don't. There are multiple gym goers at my local weight room who do a set, then sit down on the bench and look at their phones. They end up wasting five minutes they will never get back looking at the phone seated at the bench in the classic stoop with head tilted down, soft glow shining up. Eventually they will get up, and do another set, but this literally takes a five minute cycle, and they will still follow each set with a stop to look at the phone. It is bad enough that the internet converts otherwise valuable, irreplaceable time with hours spent at Break.com or ESPN.com, or anythingbutwork.com. But letting the web's sugar and its insidious and delicious draw pull you from foucssing on your workout is frightfully weak. Leave the phone in the car. Focus on your lifts, your sets and your form. There is nothing in the phone that will help you clean that bar or do that pull up or curl. No, there is not an app for that.

Bain Capital or the Mob?

So an article published today http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts,discussed the complicated finances of the Romney family. There was a considerable amount of linguistic dancing about the Bain Capital model of business acquisition. Bain bought companies by teaming with partners like Goldman Sachs to cook the books of companies to be acquired. Bain and its cohorts would use inappropriate assumptions to publish financial documents that would then be used to support borrowing from unsuspecting lenders. Then Bain would pay out the money it had the acquired company's borrow as "dividends" and "fees" and let the company whose assets secured the loan die by bankruptcy. Bain made its money and left lenders with the task of working out the debt clearing process in the courts. This was legal? Technically it was probably couched as "business decisions" and not fraudulent misrepresentation. But fraud is what it was. This is exactly the model used by the mafia when it is owed money. Please see the book "Mob Rules" by Louis Ferrante. If the borrower does not pay, or is otherwise obligated, the mob takes over the borrower's business, borrows all it can to put in its pockets, buys all the sellable merchandise it can on the business's vendor credit lines and then leaves the wrung out husk for the bankruptcy courts to dismantle. This wasn't said in the article but it should be made clear. Bain and Romney bought businesses with other people's money, then made the purchased company borrow more other people's money, then put that money in their pockets as dividends and fees. They knowingly did this. It was fraud and misrepresentation that Wall Street and K Street made sure wasn't characterized that way. Please, someone, tell me how the models are different. I challenge you.