In the Wings, Another $Trillion Biden Push: Student Loans

It might seem like every major domestic spending program of the U.S. government is caught up in the multi-trillion-dollar budget “reconciliation” negotiations, but no. A significant exception is the huge college-student loan program and the massive ($1.7 trillion?) debt outstanding. It’s a separate agenda item.

The Biden administration, under constant progressive pressure, is trying to find ways to relieve or forestall repayments, which are due to resume in February after nearly a two-year pause. This is a ticking bomb for many households and indeed for the federal fisc. The Politico website reported this week on the latest ins and outs at the Education Department as it readies collections but also looks to spare as many hardships as possible and also reconnect with the 7 million borrowers who’ve already defaulted.

So far, the president, besides acting to exempt who he can in “public service,” has said he wants to trim $10,000 off everybody’s tab.  The congressional left wants at least $50,000. There are programs for adjusting payments to lower income levels, and the White House might go for a “self-reporting” period to qualify for that break. (Remember “liar loans” in the subprime housing crisis?) In any case, the more stringent collection steps taken under previous Education Secretary Betsy DeVos have been tossed out the window. The longer-run political question is whether much of this debt (the biggest amounts typically taken out for advanced degrees, often by offspring of affluence) is ever going to be recovered.

Meantime, expenses at post-secondary institutions continue to climb (the political right argues that the loan programs foster these increases). And after some pandemic disruptions, enrollment chugs along. At some public campuses like the University of California, which have lower but still substantial charges, the jumps are notable. But across the broader academic landscape, the dropout rates continue to be worrisome, and of course these add to the outstanding-loan problem, as they prefigure an earnings shortfall that threatens default even among those who do feel an obligation to repay.

So, once we have the huge Build Back Better legislation off the burner, we will soon be finding out what other powers this president has to “transform” the social contract between Americans and Washington. It’s clearly more than a classroom exercise.

The Rise of the Entrepreneurial Creative

The pandemic disrupted the labor force, but in the process also seems to have accelerated a certain type of entrepreneurialism: the startup “creative.” This includes performers of various sorts on platforms such as YouTube and TikTok, and writers and visual artists using the likes of Substack and Medium.

Many of these individuals would have previously worked for media organizations or been shut out of what used to be a narrow funnel for live or video performance. Most of those trying this direct-to-consumer reach have little or no commercial success, but many reach audiences in the millions and gross hundreds of thousands of dollars a year. (A similar phenomenon may be seen in the crafts sector, based on the boom at a site like Etsy.)

For those with the most ability to convert “hits” into payment streams, this presents a welcome financial challenge: managing growth in their enterprises (which can quickly take on support staff) while ramping up income. The banking system was not well prepared to finance these newfangled businesses and has lagged in establishing proper values for the inventory of content they produce.

On the creator side, the odds of making much of a living are still daunting, with a 1% vs. 99% ratio is commonly applied. But according to Simon Owens, a Substacker himself who produces there one of the best newsletters tracking the field, this breakdown is too pessimistic.  Among those who doggedly put out content rather than simply dabble occasionally, the chances of at least eking out entry-level media industry pay are decidedly better.  And, in one of his recent posts, he argues that substantive journalism (in this case, a self-styled watchdog on the political right) can sell—it’s not just argumentative punditry.

In some sense, the cacophony of the modern internet has made this opportunity possible, although a sorting-out process, probably involving groupings of output—much like the old newspapers and magazines—will be needed to keep customers paying up for informational material.  The danger there is that the preferred platforms will be under pressure to stifle outlying voices, undoing one of the arguable attributes of a disaggregated town square. As it is, YouTube faces accusations of such “censorship,” while Substack maintains that a “no cancel” openness was one of its basic reasons for existing.

The downfall of much traditional media has been a sore point for many of us from that old guard. And no one has convincingly shown how the new individualized model can effectively report on important elements of public life, such as state and local public affairs or business, large and small.  But the dying model had its significant limits (including the frequent sway of sponsors and the often miserable pay for incoming or tiny-publication talent). Having an alternative blossom on the web is testimony to the “market” that exists for well-chosen words and sounds, and the trick is to satisfy it.

Filling the News Hole: Advantage, Left

I’ve always enjoyed reading the lefty press—the honest-to-goodness lefty press, not the mainstream one that masquerades as impartial—because it tends to put a premium on information and sometimes reporting. If that side is indeed more informational than its right-wing counterparts, maybe that’s because the documentary instincts are stronger among the camp that sees its struggle as dialectical. It seeks to establish a record of systemic failure or injustice. The right’s media tend to frame coverage more in terms of cataloguing what it sees as outrageous (usually official) behaviors.

So, on a national scale, I’d look to publications such as In These Times or even The Nation for more grist than I’d expect from, say, National Review. (Here’s a recent item at nationalreview.com that takes issue with the idea it doesn’t do much reporting, though I think it rather supports my description. Suffice to say there’s a mixture of detail and polemics in all the “thought” journals—the balance is what’s in question. At the libertarian end of the right, Reason mag offers a good amount of fiber in its columns.)

On a local level, in New York City, a free print monthly called The Indypendent is worth reading even if labor socialism is not your drink. It has proven to have early radar on the hard-progressive capture of several Democrat and therefore general-election races, going back at least to the AOC for Congress phenomenon. It covered what used to be Quixotic candidacies, and now records victories often as not over the clubhouse machines, particularly in city council districts.

But the “Indy” also spends much literal and digital ink on the agenda of these politicians, attempting to support the case for redistribution of wealth and transparency in the execution of governmental authority and programs. (Spoiler: it finds they frequently serve the interests of the rich and powerful!) A case in point is an extensive package in the current “9/11” issue: “20 Years Later: How the new World Trade Center became a monument to greed and power that most New Yorkers want nothing to do with.”

There’s always been plenty about the plight of BIPOC groups and the pitiful support of arts and environmental collectives. But in any form of community organizing, jaundice must give way to a certain earnestness for change. In the Indy’s case, that’s usually twinned with sophistication about the way things work in the public sector and the prospects for pressuring  private entities. Anybody in town who expects heat from the left should be reading.

As the business of traditional journalism dries up, especially at the town level, this arguable edge of the left in filling the void will grow more important. (Another advantage may be a greater willingness to work for peanuts in support of the cause.) The press is going to supported by benefactors, more than advertisers, and we can already see that shaping up around the U.S. The funding of these local-news collaboratives suggests the right is barely in the game.

Didn’t somebody say knowledge is power?

5 at Feed: Ozy, Vietnam, Vegan Virtue, School Counts, Pakistan

10/1/21

This busy week features a fivesome of punditry nuggets at Newsfeed – Tim W. Ferguson (timwferguson.com) In reverse order, there’s the scandal that is overwhelming the once-adored (if unread) Ozy Media, the conflict that pits Vietnam’s quest for global commerce against its authoritarian state, the pretentious veganism of a star Manhattan chef, the latest parental pullouts from a balky public-school system (in Los Angeles) and the practiced diplomatic deceptions of Pakistan. Surely there’s an argument waiting to be had between us.

My Feed: Global Gig Slog, Syph Babies, Thai Visas, Freight Rail

Here’s the past week’s foursome from Newsfeed – Tim W. Ferguson (timwferguson.com) –my mini-commentaries off the recent media. This assortment includes: A review of the plight of “gig”-app drivers and delivery people around the world that forgets what these souls were doing before; a startling look at an upsurge in births from mothers with syphilis, which considers just about every social remedy except preventing such pregnancies; an effort by Thailand to lure the global “remote economy” with 10-year visas, and the underappreciated virtues of America’s freight-railroad sector. Surely something there for you!

3 At Feed: DHS & TSA, China’s Richest and Food Labeling

This week, Newsfeed – Tim W. Ferguson (timwferguson.com) hosts a trifecta of mini-commentaries plucked from the pages of our working press. Any anniversary of Sept. 11 would not be complete without a pass at its bureaucratic legacy, the Department of Homeland Security. As well, there’s a thought about the future tycoons of China, now that Xi Jinping seems intent on there not being any such amassing of wealth (at least outside of the Communist Party). And on the domestic front, what of the lawyers who are intent on seeing that animal proteins are properly labeled for human consumption? My unapologetic assortment is ready for your consideration.

At the Feed: Ida’s Rebuild, ‘Traffic Violence,’ Gen-Z Invests, Vax Cards, Dailies in Distress

This week at Newsfeed – Tim W. Ferguson (timwferguson.com) are *5* brief comments from items in the current press. Of course, the post-Ida storm response is one–should we keep tempting fate by restoring communities? Also: the alleged injustice of “traffic violence,” the reassuring aspect of Gen-Z’s bent toward equities (as opposed to equity), the tricky business of enforcing against vaccine-card fraud, and the quickening demise of some U.S. daily newspapers. Take a look and take your best shot below:

At My Feed: Trains, Planes, Hospitals, Wall St. Touts

At Newsfeed – Tim W. Ferguson (timwferguson.com) this week, you can read my quick observations on current topics: Commuter-train counts show how dreadfully slow is Manhattan office districts’ rebound from the pandemic pounding; airports such as LAX are rich public assets just waiting to be turned into funding sources to rescue indebted municipalities like Los Angeles; “nonprofit” hospitals are already money machines that don’t get the attention they deserve for absorbing health-care dollars; and, Wall Street brokerages are similar to sports-talk jocks: full of opinions not likely to win you a bet. Let me know what you think.

Week’s Feed: Henri Blows, Asian Negation, NYC Crime

This week at Newsfeed – Tim W. Ferguson (timwferguson.com) is a trio of items touching on what the latest big storm (Henri) to hit the East Coast should remind us about living and building on the edge of cruel nature; on the latest disappointments in Covid-wracked Southeast Asia, which are not just economic; and on what a street-by-street breakdown of crime statistics tells us about New York City. Have a look and then have a say below.

Housing Boom? Not in Land of Lincoln

You’d think housing prices are rising everywhere in America, the way the current boom is discussed. And that’s nearly true, for lots of reasons: the low interest rates on mortgages; the bidding up of asset prices at a time of loose money; the desire for bigger and more distanced properties in the pandemic, and  the swallowing up of thousands of tract homes by investment outfits looking to rent them.

But even with those influences, not everywhere is rising by double-digit percentages annually. People can only live—or own—in so many places at once. And so it is that in a good 10 metropolitan areas, according to realty data site CoreLogic, you’ve barely seen any price appreciation in the five years to June 2021. So, nearly no gain for existing homeowners, and no frightening increases for affordability migrants.

Keep in mind that even in the years just before Covid, real estate was hot.  That includes major cities such as New York, which then softened as virus-conscious residents departed for greener pastures.  Thus a five-year period captures both mini-cycles. Where were buyers not looking, pre- and post-lockdown?

For one thing, in the oil-and-gas belts. Fossil fuel prices were weak for most of those five years. So, no surprise that Louisiana and Oklahoma locales (in Census terms, metropolitan statistical areas) have lagged, with Houma-Thibodaux showing a cumulative price rise of only 9%. (No MSA had a decline, and for the overall U.S. the increase was 42%.) 

If you had to pick a state of general torpor, however, that state would be Illinois. It occupies four of the 10 spots, and was one of only three states to show a 10-year population decline in the 2020 Census.

And let’s give special notice to Peoria, IL. Turns out that Peoria figured in a 2014 Kiplinger’s list of 10 markets where housing had fallen the most since its 2006 peak—about 10%. That means at least a 15-year spell for homes there with a flat net.

That’s either good or bad news, depending  on whether you’re a seller or buyer. Will the news be changing? Illinois has a particular problem with public-pension indebtedness, and taxes have been trending up. Maybe the economy will rally regardless. But it’s safe to say that, for now, the idea of a universal residential rush will not play in Peoria.

CUMULATIVE CHANGE IN HOUSING PRICES, June 2016-June 2021 (Source: CoreLogic*)

Houma-Thibodaux LA 9%
Peoria IL 10%
Lawton OK 10%
Springfield IL 10%
Bloomington IL 10%
Shreveport-Bossier City LA 10%
Carbondale-Marion IL 11%
Lafayette LA 11%
Enid OK 12%
Beckley WV 12%

*These rates are calculated using a CoreLogic Case-Shiller Index. In some small metro areas, differences in modeling techniques can make results volatile. The Case-Shiller model smooths the index to deal with this volatility.