College Students vs. the Corporate Machine – Machine’s Winning

Published on Monday, July 15, 2013 by Campaign for America's Future Blog

by Richard Eskow

Once this nation saw higher education as a citadel of learning, growth, and opportunity. Now student debt is being used as a cash cow to subsidize corporate tax breaks, while universities become incubators for corporate employees and cheap laboratories for private-sector patents.California State University Long Beach students protest against budget cuts (Reuters)
The new student loan deal being cooked up in Washington is part of a larger picture. The forces of technology, globalization and wealth are calling the shots in government nowadays, and they’ve got higher education in their sights. Corporations want colleges and universities to serve them, not students.
In the dystopian future unfolding before our eyes, whole segments of the population are being offered up to the Corporate Machine. And unless we reject the corporate commodification of our common humanity, there’s no end in sight.
We can start by doing something about student loans. But that’s only a start.
Future Fail
They’re designing the workforce of the future and, frankly, traditional education doesn’t figure into it very much.
As Andrew Leonard notes in Salon, the Internet is creating new and unjust markets for piece work. Online workers provide temporary “assistant” tasks for the well-to-do, competing for the jobs based on who’s the most eager to please – and who’s cheapest.
“Fancy Hands, “Mechanical Turk,” “Task Rabbit”: As the website names make clear, we’re not talking about the dignity of labor here.  And it’s a buyer’s market. The consulting group Deloitte waxes rhapsodic in a report for its corporate clients:

“The range of skills available through these platforms is expanding; among the workers offering their services through such marketplaces are … translators, business analysts, and financial modelers.”

Then there’s automation, often described (or mis-described) nowadays as “artificial intelligence” or “AI.” A PBS program quotes Prof. Gary Marcus of New York University as saying, “Once somebody develops a good AI program it doesn’t just replace one worker. It might replace millions of workers.”
As Deloitte’s consultants breathlessly put it: “Talent clouds make it possible to engage individuals anywhere in the world. AI and other technologies make it possible to automate knowledge work … These trends are anticipated to shape the future of knowledge work.”
“Knowledge work” is what we typically acquired a college education to perform. Think it’ll be worth taking on a six-figure student loan debt to become a “Task Rabbit”?
Welcome to Your Pod
Colleges and universities have traditionally taught critical thinking, offered a breadth of social and human knowledge, and sought to provide students with the insight, skills, and courage to become the leaders of the future.
Not anymore. As the Chronicle of Higher Education reports, corporations want to turn college education into an employee training program.  “To expect business to bring graduates up to speed,” says an executive for Boeing, is “too much to ask.” (“Too much to ask”? Boeing receives billions each year in government contracts and corporate profits are at record highs.)
“Once upon a time, ‘trainee’ used to be a common job title,” says Philip D. Gardner of Michigan State University. “Now companies expect everyone, recent graduates included, to be ready to go on Day One.  The mantle of preparing the work force has been passed to higher ed.”
But students, not corporations, will be expected to pay for these ‘trainee’ programs – along with whatever government subsidies can be extracted from taxpayers.
Two-year colleges were created, in part, to meld workforce needs with educational resources. But the Corporate State sees no need for any other form of education. The university lecture halls of the past are becoming incubator pods for the disposable corporate employees of the future.
Lab Rats
This corporatization of education is reflected in the appointment of Janet Napolitano, Homeland Security Secretary and former Governor of Arizona, to head the statewide University of California system. As the Los Angeles Times reports this week, it was “an unusual choice … (for) a position usually held by an academic.” The Times reports that unnamed officials felt Napolitano’s Cabinet background “will help UC administer its federal energy and nuclear weapons labs and aid its federally funded research in medicine and other areas.”
Energy and nuclear weapons research helps fund university budgets. It also leads to lucrative government contracts for corporations. Medical research leads to lucrative drug patents for Big Pharma.
That’s how the Corporate Machine works. Colleges and universities are there to generate its “inputs,” intellectual and human, not to advance our collective understanding and knowledge.
Workerless America
It’s all part of a decades-long pattern. Once we had a thriving middle class. Then the ability of working Americans to earn a living wage was systematically destroyed by a series of deliberate policy decisions.
The minimum wage was frozen, driving ever-greater numbers of working people into poverty. The rights of employees to organize and negotiate were eroded, driving down wages even more.  Elected leaders looked the other way as corporations gutted pension plans. NAFTA and other trade deals drove working wages down even further.
As middle-class Americans plunged further behind, their families and their communities fell with them.  That’s when the Corporate Machine learned something very important: It didn’t need them.  Business leaders discovered the Workerless Economy.
There was good money to be made by using cheaper workers overseas and temporary and unskilled employees at home.   The U.S. job market increasingly swung toward unskilled jobs, a trend that’s been accelerated by the current “recovery” – which is really a radical economic shift toward a corporate boom for the few, and away from prosperity for the many.
Money for Nothing
As the collapsing middle class lost much of its buying power, Corporate America discovered another way to make money: Why pay you to buy their goods when they can lend you the money instead?
Americans plunged into ever-increasing cesspools of debt, fueled first by the Clinton stock market bubble and then by the bank-designed (and fraud driven) mortgage bubble. Deregulation meant that anybody with a large enough corporate presence could get in on the bank boom.
Goodbye, General Electric. Hello, “GE Capital”!
But what goes up must come down – and you can be sure the Corporate State didn’t plan to pick up the tab. Once they had been rescued – by the same taxpayers they’d been exploiting – financial executives went back to profiting from the declining wage base of the middle class.
Building and selling things takes a lot of work. You have to hire and pay people, both to produce and ship your goods and so they can buy the goods you produce.  It’s easier to financialize your corporation and capitalize on government’s extraordinary generosity to bankers.
To squeeze out even more profit, they learned how to charge more for holding and managing money. Thomas Philippon of the New York Federal Reserve found that the cost of “intermediation” (banking services) was 2 percent in 1870, rose to 6 percent by Depression-era 1930, and fell below 4 percent in 1950.
These banking charges rose slowly to 5 percent in 1980 – and then shot up to almost 9 percent by 2010. They become banks for the same reason Willie Sutton allegedly robbed them: That’s where the money is.
Cash Cows
If you don’t need an educated workforce or prosperous consumers, you certainly don’t need to worry about making sure that students can afford college.  So it’s no surprise that students would be shafted by the new student loan agreement being cooked up in Washington.
As David Dayen explains, many of the claims being made about this deal are misleading. Rates would rise from the fixed rate of 3.4 percent, which expired at the start of this month, and could soar as high as 8.25 percent for graduate students and 9.25 percent for undergraduates.
The New York Times reports that Republicans are refusing to accept any deal that adds to the deficit. That means no reduction in the huge profits the Federal government is making off these loans – $51 billion this year alone, as Shahien Nasipour reports in the Huffington Post.
In other words, Republicans want to keep bleeding America’s students so they can keep taxes low for America’s billionaires and corporations.
Washington ignored Sen. Elizabeth Warren’s proposal to offer students the same low rates American banks get from the Federal Reserve. Our representatives have the power to treat students the same way they treat Wall Street – but they won’t.
Sorry, students: You’ve become cash cows for billionaires and the Corporate State.
Shafted
The White House, which fought the good fight on student loans early in Obama’s tenure, had already turned its back on debt rates.  As Dayen notes, this apparent compromise is very close to what the Administration proposed in its 2014 budget.
“Liberals are going to hate the new student-loan deal,” says Jordan Weissmann in The Atlantic. Forget liberals: Students are going to hate it, especially because it will doom many of them to a form of debt penury.  (You can demand a better deal from your representatives here.)
Know what students are going to hate even more? Graduating four years from now, after four years of financing a college turned corporate training facility and laboratory, into an economy which still won’t have regained all the jobs destroyed by Wall Street’s 2008 crisis. While Washington works to extract more money from students, it’s doing virtually nothing about unemployment.
Young people will still face the imprisoning burden of student debt, the fragmentation and exploitation of the American workforce, and the conversion of education from an engine of democracy to a consumer-funded service division of corporate America.
The Machine Stops
Undoubtedly many executives and politicians admire the principles of social mobility and educational access. But they’ll continue to act in their own self-interest, and the student loan deal that’s taking shape reflects that.
We have a choice: We can passively accept this commodification of our young people’s humanity and our own. Or we can resist it.
That means refusing to accept rhetoric instead of action – whether it comes from Republicans or the White House, whose use of the Twitter hashtag #dontdoublemyrate was a cynical ploy to score political points against a plan it had already essentially endorsed.
We need to reject the politics of cynicism and demand that politicians refuse any increase in student loan rates. We need to stand firmly behind the proposals and the values represented by the educational positions of politicians like Sens. Bernie Sanders and Elizabeth Warren.
And we need to be in the streets demanding change.
Everybody’s Revolution
We need a college education revolution. Student loans are only part of the problem. College education should be affordable – or free – to students at any income level willing to learn. Exploitative educational corporations like the “University of Phoenix” must be investigated. And we need to ensure that institutions of higher learning aren’t turned into instruments of lower servitude.
The fight for higher education is part of a larger fight for the soul of our society. The discarded American middle class can still be rescued.  We need to ensure that the college graduates of today are the productive citizens of tomorrow, able to find meaningful work and participate fully in democratic society. We need to build a future in which they have productive, healthy work lives and secure retirements in their old age.
In other words: The college revolution is everybody’s revolution.
But it’s nearly too late. The operators of the Corporate Machine need to be stopped, because they’re don’t plan to stop with college students. They’re coming for the children.

© 2013 Campaign for America's Future

Richard (RJ) Eskow is a well-known blogger and writer, a former Wall Street executive, an experienced consultant, and a former musician. He has experience in health insurance and economics, occupational health, benefits, risk management, finance, and information technology. Richard has consulting experience in the US and over 20 countries.