A Very Sad Day

Once again a student has died violently at Zenith, this time by her own hand. She was found yesterday, badly burned, and she passed on today at Bridgeport Hospital.

You never, ever, get used to it. Ever.

What's In Your Pocket? A Graduation Guide For Living In The Age Of Debt

A few weeks ago, one of my friends was sorting a box of stuff that had gotten thrown into the garage prior to a kitchen renovation years ago.  She found an historical artifact that she swears she is going to send me for a future lecture on the recent economic meltdown.  It is a flier from one of those advertising mailers that usually has coupons for a few things you really want (like laundry soap), as well as ads for a few local gardening centers and siding contractors.  This particular ad was for Countrywide Financial, one of the lenders whose dishonest practices figured prominently in the home loan bubble.  Countrywide offered to refinance her home if she just filled out the coupon and sent it back, no credit check required.  "Imagine!" she said to me, as if she had found a poodle skirt in the closet. "Refinancing your home through an advertising mailer!"

But that was exactly how it happened in those days.  And despite everything, that's how it is still happening, except that the banks are shifting their lying ways away from a market they have already destroyed and towards consumers who have not yet had an opportunity to go into bankruptcy.  This market is working class and middle class college students from prestigious institutions who will actually become paid workers (as opposed to the people who take massive loans out for on-line degrees and for profits, who default at the highest rate and often don't get a degree either.) A graduating senior who went to a mandatory financial aid exit interview informed me that, as part of this counseling session, a representative from a major corporate bank was available to explain to them how important it would be to sign up for a couple credit cards to establish a good credit rating.  This would assume, of course, that these students had not already signed up for credit cards from the people who shill these instruments in the student center. 

Part of what amazes me (other than the fact that colleges allow these snake oil salespeople on campus) is how persuasive the banking industry can be in convincing us that what is good for them is good for us too.  Got debt?  Here's a great idea:  you need more! Because actually, paying back a college loan that is the equivalent of one or two down payments on a house, or four or five decent used cars, does not give you a credit rating at all.  This was what I discovered when, prior to buying a house and after having paid back a small but significant graduate student loan, I tried to get a car loan.  Oh sure:  they were willing to lend me the money, but not at a good rate of interest.  Why?  Because I had no credit history, even after having made payments of over $20,000 in principal, interest and fees.

It is this crazy glitch in the system that allows the credit card lady to encourage people who are already massively indebted to take out more loans and not be locked up for the liar that she is.  The only thing more un-American than having a bad credit history is having no credit history: hence, much of the information young people are being given as they exit college in debt is, in fact, aimed at helping them to take on more debt.  We have to remember that this counsel is coming from a business class that contributes gobs of money every year to politicians who howl about a national debt that they claim is out of control, not because of war, runaway medical costs and tax breaks for the wealthy, but because of education and services to the poor, elderly and disabled. This national context makes it particularly bizarre that there is advice all over the Internet (probably written by former English majors now working for Bank of America at $10 an hour) about how to raise your credit score by maintaining a "healthy" amount of debt all the time and paying it off over the full term ("small amounts every month" is the phrase that recurs constantly) so that the banks can haz maximum interest the borrower can demonstrate good consumer citizenship.

So here's the Radical financial aid exit interview for those of you coming out of college or graduate school who are looking down that financial shot-gun barrel:

• Paying off your college loans early saves you lots of money in interest.  This may seem inconceivable to you, but making one extra payment a year will save you thousands of dollars in the end.  Figure out how much extra that is every month (if your loan payment is $500, that's less than $50, or one Saturday night bar hopping in lower Manhattan) and add it in.
• Everyone needs one credit card to buy plane tickets, and to cover some kind of emergency. By emergency, I mean realizing that a new transmission is in the cards, and you need that vehicle to get to work.  A new couch on sale at Crate and Barrel is not an emergency.
• If you are consistently carrying credit card debt you cannot afford to live the way you do.  It is one thing to use a credit card to buy a couple thousand dollars worth of clothes that you will need to start your job; another entirely to be buying your groceries and gas with a credit card while your paycheck dribbles away on other things.  Create a realistic budget, compare it to what you actually spend, and adjust accordingly.
• You don't "need" to buy your home; hence, you do not "need" to build a solid credit rating in your first few years out of school.  You may never need to buy your home.  You may want to buy your home; it may fulfill a lifelong dream of domesticity to own your home; but it is actually not necessary.  In fact, owning your own home is far more expensive than any real estate agent or loan officer will tell you:  yes, the property taxes and the mortgage + the mortgage deduction will come out to less than renting in most places.  But, utilities and energy costs aside, what about the part where a tree falls on your roof, or the old drunk upstairs leaves the bath tub running?  So don't kid yourself that taking on all kinds of new debt following graduation is part of your long-term financial plan.
• Consider getting a second job to pay off your student loans.  One or two shifts a week as a food server, with tips, would actually allow you to double your payments and -- get this -- pay off that debt in far less than half the time, because you are whacking away at principle at an astonishing rate.  The biggest lie about student loans is not the idea that the education you went into debt for is worth having, but that you should be able to graduate and just have a normal life like rich people do that has no pain in it.  Paying off debts often hurts, and requires sacrificing leisure if you are going to do it expeditiously.  But you might want to do that to become debt-free.
• Debit cards are worth it if you pay attention.  If you don't pay attention, your bank will charge you all sorts of fees for using a debit card, but if you do pay attention, you don't have to worry about carrying wads of cash around and using your credit card just because you have neglected to go to the bank.  That said, having an unmeasurable access to your money makes it more likely that you will spend it in unplanned ways.  Cash is better.
• When establishing a bank account after graduation, look closely at smaller banks and credit unions.  Any institution that has to work for your business is going to be more competitive in its services and fees, and credit unions are established for the benefit of the membership, not shareholders.  One thing to remember is that you can change banks if the one you are patronizing doesn't serve you well, although online banking practices makes this infinitely cumbersome.  I have been planning to leave Bank of America for years (the account that I originally opened was at a local bank that was eaten by larger banks in the go-go eighties, and eventually by BOA in 1995) and I have put it off because I would have to re-enter all the payment information for my monthly bills. Dumb, eh? But my point is this:  bank fees change all the time, and banks count on it that you are not paying attention to them.  That extra $35 you are being charged for this or that is a big chunk of that extra student loan payment you want to make every month.
• Suze Orman is a highly grating personality but she is right about almost everything.  One of her, or someone else's,  money management books should be on your summer reading list.  Her basic message is a good one:  show yourself a little tough love, don't indulge yourself with a life you can't afford, free yourself from high interest debt, and you will liberate yourself to make the choices you want to be able to make in life.  You might not become rich -- but you will be dramatically less coercible.  You won't have to stay in a job you hate just to pay the bills; you can save money and support a life doing underpaid labor (like college teaching, for example); you can change careers; you can drop out of the workforce for a few years and raise your kid/travel/try to write a novel.

And while you are at it?  I know this is anathema, but go talk to your parents about money.  You would be surprised what they know, and if you are really lucky they will share their mistakes as well as the things they think they have done right.

The First Casualty Of War

This video of two Reuters news staff, two children and numerous unarmed bystanders (including a van that tried to assist the wounded) being being shot at and killed by a US military helicopter in the Iraqi suburb of New Baghdad will resonate for those of us old enough to remember the senseless cruelty of the Viet Nam War. As in Viet Nam, the lies begin with the soldiers on the ground and then trickle up.



It's long and tedious, as well as graphic, but worth watching. It was obtained by Reuters with great difficulty via the Freedom Of Information Act, and sent to me by one of my students. For additional information, see Wikileaks.

When The Radical Hits The Road: Dispatches From The People's Republic Of Berkeley

Every time I fly to the left coast and feel this disoriented I try to remember that getting from Shoreline to San Francisco back in 1848 took between six and eight months, depending on whether one went overland or took the water route. Of course I feel disoriented: I deserve to feel disoriented, since it is actually absurd to travel that far as fast as I did.

Where am I? Why am I here? Oh.

Well, I'm in Berkeley, where I have never been before, although I have visited San Francisco about four times, and every time I do I phone Mrs. Radical and say, "We've got to move here." Actually, she made the same phone call to me a few months back. And while the part of Berkeley I am in (at least so far) doesn't seem as spiffy as the parts of San Francisco I have been in, the short walk from the hostel where I am staying to Telegraph Avenue was a reminder that there are some places in the world that have not been homogenized and upgraded for the wealthy. I walked by People's Park, which is still decorated with a home made sign, and where they have not fenced in the grass to keep people from hurting it by sitting down and reading a book. There seem to be a fair number of homeless people living there as well, something that is no longer allowed in Tompkins Square Park, a similarly radical and communal space on the Lower East Side of New York during the 1960s and 1970s.

The other thing they have on Telegraph Avenue is culture. I searched "Berkeley" at Indiebound before I left, and this place has nineteen independent bookstores. Nineteen. There are twenty-eight in New York (but that is counting all the Museum bookstores), and there is exactly one in Shoreline, home of a world-class university -- pardon me, two, if you count the used book store operated by the Bryn Mawr College alumni association. And having only walked five blocks of Telegraph, already I have found two record stores. They sell actual vinyl, as well as CD's. I have also located three head shops, which have in the window an impressive collection of bongs, a variety of products to clean the bong, and so on. I took a look around and I do not think finding something to smoke in the bong would really put a person out either.

Oh, yeah. And if there was any doubt in my mind that I wasn't in Kansas anymore Toto, after eating a great Mexican dinner for peanuts at Mario's La Fiesta, I walked into Moe's Books and William Vollman was giving a reading from his new book Imperial.

Everything smells of patchouli. Decades of patchouli.

Anyway, back to business. I am here to do some research for the next three days, and then go to another history camp (a different history camp than the one I attended last summer.) So more about that later. But let me just say: if you are reading this, and you are a friend of mine, and you ever hear that I am considering buying a ticket on Southwest Airlines, please remind me that on the five hour flight from Big Regional Airport to Las Vegas, the chief of the flight attendants performed an ongoing stand-up comedy routine. I missed much of it, thanks to the Bose noise canceling headphones that I had buyer's remorse about three weeks ago but now am thanking the Goddess and Dr. Amar G. Bose for. But the half hour at the beginning of the flight and the half hour at the end of the flight were agonizing, perhaps more so because the man next to me was working on his computer, and had his left elbow jammed in my side; and the (very large) man behind me had his enormous, bare foot up on my other armrest.

What is it about men and space?

Oh I know, my conservative critics will say that I want socialized this and socialized that, but that I have no taste for the volk. Well, I have to admit that my occasional distaste for The People does give me pause: the jolly camp counselor routine is not my bag, nor is the dirty foot in my face thing something I would endure again without delivering a carefully prepared speech to the offender. But I'll tell you one thing: Southwest knows how to get people where they are going, and on time too. In fact, they might want to consider hiring Zenith grad Herb Kelleher to run national health care, because every time he tinkers with his business model it works better. For example, I still find it disconcerting not to have an assigned seat, and I have always hated standing in those lines. On the other hand, you have to queue for every airline. And because the lines to board Southwest planes are no longer free-form (everyone has an assigned place in line, which means seating is first-come, first-serve and people settle where it is easiest once the best seats are full) people become naturally more orderly and rational in how they board the plane. I have never seen planes loaded as efficiently as the two I was on today. It literally took about twenty minutes from the time they started to load to the moment the plane pushed off from the gate, and because they still allow you to check one bag free, there wasn't the added hazard on each end of worrying about whether someone was going to drop a suitcase on your head. Furthermore, although other airlines allow you to pick a seat (aisle, please) it is simply the illusion of choice, unless you are in business class or first class, since more often than not your seat changes on the day of the flight and you end up sandwiched between two babies. So having an assigned seat is actually faux privilege; and certainly not a privilege worth fighting for if Southwest can get me in a seat, any seat, more efficiently and get me to my destination on time.

So that assigned seat is kind of analogous, if you think about it, to the increasingly fragile privilege having private health insurance. Maybe you get what you need, but because other people are being treated in the emergency room, your local hospital goes bankrupt. Or you pay through the nose to make sure you are protected from catastrophe, but then they deny coverage for this and that, and you just pay, and thank your lucky stars that you didn't need an experimental brain transplant or something that would be really expensive and force you to live under a bridge.

I think some folks down on Telegraph Avenue may have already had uninsured brain transplants: I'm going to inquire into that tomorrow when I mosey down there for breakfast, but it sure looks like it.

And then off to the archives. Wish me luck.