Oped Sent to Press Democrat
“These capitalists generally act harmoniously and in concert to fleece the people.”
– Abraham Lincoln
Do you think Lincoln was anticipating the music being made by Sanford Weill and Rubin Armiñana at the Green Music Center at Sonoma State University? Could he have imagined the shenanigans the modern financial sector would concoct to fleece the people or the charade of giving some back in the form of “philanthropy?”
On May 12th, in return for a $12 million donation to the music center, Sonoma State University will bestow an honorary degree, a Doctor of Humane Letters, on Sandy Weill, former CEO and Chairman of Citigroup, one of the banks we rescued. Mr. Weill, at Citigroup and Travelers Insurance, and President Armiñana, as president of SSU, have helped create the perfect storm, seriously affecting students’ ability to receive a quality education in a timely manner and without onerous debt.
Public education is suffering and all we hear about is pension plans. This is a diversion. The #1 cause of this suffering is casino finance – the kind of heads they win, tails you lose gambling that created the Great Recession.
Subprime mortgages helped create the recession, which continues to simmer below the surface of corporate profits. Such risky mortgages were once the province of small loanshark companies preying on the poor, uneducated, and black, primarily in the South. Sandy Weill brought that risk into the mainstream by buying up these companies – Commercial Credit, Primerica, and Associates First Capital. By 2000, Citigroup had become the loanshark, with almost three-quarters of its mortgages subprime. There’s no space here to list all the ways this undermined the economy, but it took money away from state and local governments, impairing their ability to finance education at all levels, including at SSU. It also removed a vehicle for financing of individual educations – home equity loans.
The average student leaves college with $25,000 of debt and student debt is now higher than credit card debt. Many students find their debt grows as they try to pay it down, not a surprise in an economy which can’t provide full-time work for more than half of new college graduates. This money should flow to pay for services and goods. Instead it goes to bailed-out banks, which find ways to avoid paying taxes, further hindering the financing of education.
Add to this a spending spree for new buildings on college campuses at a time when fewer people can afford to attend those colleges. College presidents are erecting greater edifices to their greater glory. President Armiñana is no exception. How many of you know that Sonoma State is $300 million in debt? Or that the Green Music Center and the Student Center will require $7 million in debt service for the next 30 years? Once these Centers are up and running, SSU’s debt payment will have nearly tripled since 2007.
As a symphony fan, Sandy Weill wants a first-class music center when he comes to his $31 million Sonoma County house. There are Sonoma County residents who want it, too. The arts are important for any society and, in a healthy economy, there’d be money for it. But for the wealthy, this is a way to take one more dip into the taxpayers’ pockets. The1%, which already doesn’t pay its fair share of taxes, buys the construction bonds and the interest for those bonds comes from your wallet.
So the tuition at Sonoma State has gone up almost 300% since 2001, while its faculty is one of the lowest paid. Fees have gone up, not to finance education, but to pay for Armiñana’s increasing debt. Those fees will go into the pockets of the bond buyers. There are fewer classes, student to teacher ratios increase, enrollments decrease, and college educations become more out of reach.
Once, the United States was #1 in the percentage of its citizens who earned college degrees. Now, it ranks 16th out of thirty-six developed nations. Why is this okay with the 1%? The tale, of the increasing privatization of public education and the profits to be taken from you to pay for it, will have to wait for another time. In the meantime, Armiñana is bestowing an honorary degree on Weill. Shouldn’t we be outraged?