The Government Is the Problem, Part Five Million
Jun 8, 2010 at 1:16 PM
If anything has made my blood pressure spike this week (and it's been a bad week), it would be today's Huffington Post article reporting the collusion of corporate banks and colleges across the country to exploit students' private information and push credit cards on them:
Some of the nation's largest and most elite universities stand to gain millions of dollars from selling the names and addresses of students and alumni to credit card companies while granting the companies special access to school events, the Huffington Post Investigative Fund has found.
The schools and their alumni associations are entitled to receive payments that multiply as students use their cards. Some colleges can receive bonuses when students incur debt...
"The fact that schools are getting paid for students to rack up debt is a disgrace," said congressman Patrick Murphy, a Pennsylvania Democrat and former professor at the U.S. Military Academy at West Point. He said that banks' payments to schools amount to "kickbacks."
While the typical statist spin on this would be to disparage the evils of unfettered capitalism and call for more regulations, it's important to remember that the biggest culprit here is the government. Many of the universities complicit in exploiting their students' financial soundness for a quick buck are state universities (like the University of Michigan, which featured prominently in the article) -- i.e. government-run and funded institutions.
And the worst corporate culprit here is Bank of America:
Bank of America, which dominates the market, said it has affinity contracts with some 700 schools and alumni associations, where marketing practices vary. At least 100 schools are believed to have affinity agreements with other financial institutions.
Would you like to guess who Bank of America's largest shareholder is? That's correct: the U.S. federal government. Not only is the bank owned by the government, it is a highly regulated institution in a highly regulated industry, and recieves an alarming amount of direction from government executives in Washington. This collusion between state-sponsored schools and state-sponsored banks to fleece college kids is a textbook example of what Ron Paul calls "corporatism" run amok.
After a record like this -- of exploiting students and violating their privacy for profits -- I find myself more resentful than ever at the billions of dollars in bailout money that Bank of America received from those students and their parents as a reward for this kind of behavior.
Maybe the Tea Partiers are on to something with their outrage at this kind of thing. If you're not a outraged, you're not paying attention.