Menckens Ghost

More About: Economy - Economics USA

Media angst over tuition loans but not car loans

By Mencken’s Ghost

Just when you think that the media can’t get any more herd-like, shallow, formulaic, unquestioning, and misleading, they prove otherwise.  Their angst over tuition loans is a case in point.

The herd is now mooing in unison that recent college graduates carry an average tuition loan debt of about $25,000.  Adhering to their shopworn journalistic technique of peppering their stories with superficial human-interest anecdotes, reporters have portrayed such graduates as innocent victims who need to be rescued by our munificent and benevolent government. 

The same overused angle was employed during the collapse of the housing bubble.   Mortgagees with underwater mortgages or foreclosed homes were victims of greedy banks, went the standard storyline, and therefore needed to be rescued by generous Uncle Sam.  They were not greedy gamblers who had taken out mortgages they couldn’t afford, including second and third mortgages, betting that their mortgaged home would appreciate enough to cover their credit binge.

Now this victimology angle is collapsing faster than home prices collapsed. 

It is coming to light that most of those who were foreclosed on were not victims of paperwork shenanigans by banks, as the media herd had led the public to believe.  For example, a new study by the federal Office of the Comptroller of the Currency shows that only 6.5% of the borrowers set to receive part of an $8.5 billion settlement between federal regulators and banks were actually harmed in some way.  In other words, the remaining 93.5% will be getting settlement money they don’t deserve, courtesy of bank shareholders and higher fees for bank customers.

Few of the human-interest stories during the housing collapse delved enough into the purported victims’ personal lives for the reader to establish if they were truly victims or if they had used poor judgment, hadn’t done their homework, or were ne’er-do-wells with a history of buying things they couldn’t afford. 

Journalists don’t delve deeply into people’s backgrounds because they gladly swallow the starry-eyed nonsense conveyed in journalism school that their main mission is to save the world, and, especially, to save the little people from being screwed by the big people.  Therefore, ipso facto, a little person can never be guilty of self-inflicted victimhood. 

It’s the same story with today’s coverage of college graduates with tuition loan debt.  They’re all innocent victims, and as such, their personal choices and lifestyles are irrelevant.

Readers don’t know, for example, if a featured graduate drives a nice car and has an outstanding car loan.  Why would this be relevant?  Because the average car loan is $25,995 for new cars and $17,050 for used cars, or close to the average tuition loan.  It would be difficult to empathize with a college graduate who complains about a $25,000 tuition loan but has a $25,000 car loan.  After all, even a degree in an easy major is worth something after four years of college, but a car is worth very little after four years.  Also, a degree doesn’t require oil changes, expensive repairs, license plates, and liability insurance.

You wouldn’t know it from media coverage, but a lot of the people seen driving expensive cars can’t afford them.    A case in point is the genius who posted the following question on a Yahoo message board.

Getting a $40,000 car loan at the age of 20?

Just needed some financial help on my chances of getting approved for a $40,000 car loan.

I am 20 years old
my income is $1500 per week
Current bills are a $300 honda civic lease
Car insurance on the civic is $300 per month (ya i know thats what you get for being a guy and 20)
$300 limit on a visa
$750 limit on a cap one

All payments on all my credit lines were never late and never will be late, Credit cards paid in full for past 3 months and previously paid %50 off every month.

Only have been working this job for 6months so no tax return yet, however i will never get laid off as its my Dads company and i contribute to it quite a but. So just pay stubs to prove income.

Looking to put down $10000 on a $50000 BMW.

What do you guys think?

Well, to answer your question, I think you’re a moron.  You must be a reporter I’ve had the misfortune to know.

To explain:  When I had my opinion column years ago, I met with a low-paid, twenty-something, hotshot reporter over breakfast to discuss how his profession covers the news.  He pulled up in a new BMW convertible, and, yes, he was a moron, one of the most uneducated and unread humans I had ever met. Although I probably had a thousand times more money in the bank than he did, I pulled up in a 10-year-old Toyota Corolla, which went a long way in explaining why I had more money. 

Incidentally, because he is of Mexican heritage and thus considered an oppressed minority, a Hispanic, the reporter has since been hired as a columnist by an even bigger daily to write about Hispanic issues.  In other words, he was hired because of his ethnicity, in clear violation of Title VII of the 1964 Civil Rights Act, which outlaws hiring decisions based on race and ethnicity.  Don’t expect him to write about how newspapers (and universities) brazenly violate the law in this regard.  Oh well, maybe he can now afford that BMW.

Given the fact that 37% of auto loans are sub-prime, an intellectually-curious person would ask why lenders would be loaning money to unqualified borrowers.  Not surprisingly, reporters and editors from the establishment media don’t ask this question, just as they didn’t ask it during the mortgage bubble.

The Federal Reserve banking cartel is the main reason such loans are being made.  The cartel is in cahoots with the U.S. Treasury and politicians to keep the easy-money credit scheme going until the system collapses, as all credit schemes eventually do. 

Banks borrow cheap Bernanke dollars at low interest from the Federal Reserve.  They then loan the Monopoly money at an exponentially higher interest rate to consumers.  So much of this imaginary money is sloshing around that banks can afford a high default rate.  Besides, as bank executives learned with sub-prime mortgages, they will be bailed out by taxpayers instead of going to jail when the system collapses.

Knowing little more than leftist canards and how to write simple declarative sentences, journalists have propagated the canard that the banking mess is the result of a failure of free-market capitalism.  Actually, banks are a franchise of the government and a cartel of the Federal Reserve, which is a creation of the government.  Modern banking is the antithesis of a free market, especially given that banks deal in government fiat money, which is the opposite of market-based, or commodity-based, money. 

As with so much that is messed up in the country--not only banking but also healthcare, K-12 education, and higher education--the culprit is the government.  Yet journalists believe that the government is the counterbalance to a free market that doesn’t exist.

Come to think of it, journalists are right that many college graduates are victims who have gone into debt for worthless degrees.  When they write these stories, they are looking in the mirror. 

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Mencken’s Ghost is the nom de plume of an Arizona writer who can be reached at ccan2@aol.com.

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