Ellen Brown: Still Leftist After All These Years
I devote an entire department to the fiat money Greenback lawyer Ellen Brown. She doesn't understand economics. She also doesn't understand historical documentation. I proved this in 2010. You can read the proof here: https://www.garynorth.com/public/department141.cfm.
She still publishes articles on her website. Occasionally, they are picked up by Left-wing sites. The article I analyze here is an example. It was posted on Truthdig. Truthdig is a Leftist site.
Incredibly, people who regard themselves as conservatives cite her as an authority. In the case of Max Kaiser, he actually brings her on his show. He has been doing this for a decade.
GOVERNMENT-FUNDED HIGHER EDUCATION
She is a big promoter of government-subsidized higher education. She thinks higher education should be free of charge to the masses.
She does not believe in personal debt for higher education. She regards all debt as slavery. As a Greenbacker, she believes that debt is unnecessary. The federal government can simply issue pieces of paper with Presidents' pictures on them. It can subsidize the voters. Therefore, nobody has to go into debt. Ever. This has been the Greenback party line ever since the 1880's. (There actually was a Greenback Party in the 1880's.)
To persuade readers of this, she begins with a quotation. As is the case with so many of her quotations, it is bogus. You can find it only on Greenback sites. You cannot find any reference to this document in a collection of documents published by a professional historian. She cannot cite it from anything like an official collection of documents. So, she hedges her language. She uses the weasel word, "reportedly."
The advantages of slavery by debt over “chattel” slavery—ownership of humans as a property right—were set out in an infamous document called the Hazard Circular, reportedly circulated by British banking interests among their American banking counterparts during the American Civil War. It read in part:Slavery is likely to be abolished by the war power and chattel slavery destroyed. This, I and my European friends are glad of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led by England, is that capital shall control labor by controlling wages.
She posted a link to a book published in 1895 by somebody nobody had ever heard of. This is standard in her approach to historical documentation. If you want more evidence for my statement, go here: https://www.garynorth.com/public/department142.cfm.
Then she gets to her main point: student debt for higher education.
Unlike mortgage debt, student debt must be paid. Students cannot just turn in their diplomas and walk away, as homeowners can with their keys. Wages, unemployment benefits, tax refunds and even Social Security checks can be tapped to ensure repayment. In 1998, Sallie Mae (the Student Loan Marketing Association) was privatized, and Congress removed the dischargeability of federal student debt in bankruptcy, absent exceptional circumstances. In 2005, this lender protection was extended to private student loans. Because lenders know that their debts cannot be discharged, they have little incentive to consider a student borrower’s ability to repay. Most students are granted a nearly unlimited line of credit. This, in turn, has led to skyrocketing tuition rates—because universities know the money is available to pay them—and that has created the need for students to borrow even more.
All this is true. This is because Congress intervened to single out student debt as the only form of debt not subject to the bankruptcy laws. Debt was increased under President Clinton. The revision of the bankruptcy law was done under President George W. Bush. But skyrocketing tuition rates began a generation ago. Federal loans were part of the reason. There is nothing new about this. This is the inevitable result of government intervention into the free market.
She is also correct about the following.
Students take on a huge debt load with the promise that their degrees will be the doorway to jobs that allow them to pay it back, but for many the jobs are not there or are not sufficient to meet expenses. Nearly one-third of borrowers today have made no headway in paying down their loans five years after leaving school, although many of these borrowers are not in default. They make payments month after month consisting only of interest, while continuing to owe the full amount they borrowed. This can mean a lifetime of tribute to the lenders if the loan is never paid off, a classic form of debt peonage to the lender class.
There have been thousands of articles in the media about this foolishness, but exposure has not changed much of anything. Parents still approve. Students take on this debt. Fact: we cannot protect stupid people against making stupid decisions. This is a fundamental teaching of free market economics.
The fact that a student can earn a bachelor's degree from an accredited distance-learning college or university for under $15,000 should be obvious to every student and every parent, but even among parents and students who know about this, they pay no attention. I speak from experience. Over 125,000 people have viewed my 2006 video on this, but I have received only one letter from a student who said that he took advantage of my advice. Parents just don't care. They prefer to spend tens of thousands of after-tax dollars on low-return liberal arts degrees for their kids. Other parents encourage their kids to take on $100,000 of debt. Stupidity is as stupidity does.
What is Brown's recommended solution? Massive printing of paper money by Congress in order to finance free college education for everyone.
It hasn’t always been this way. Until the 1970s, tuition at many state colleges and universities was free or nearly free. Education was considered an obligation of the public sector, and costs were kept low.After World War II, the federal government invested heavily in educating the 15.7 million returning American veterans. The goal of the Servicemen’s Readjustment Act of 1944, or GI Bill, was to facilitate their reintegration into civilian life. By far its most popular benefits were financial assistance for education and housing. More than half the veterans took advantage of this educational provision, with 2.2 million attending college and 5.6 million opting for vocational training. At that time there were serious shortages in student housing and faculty, but the nation’s colleges and universities expanded to meet the increased demand.
The GI Bill’s educational benefits helped train legions of professionals, spurring postwar economic growth. It funded the education of 450,000 engineers, 240,000 accountants, 238,000 teachers, 91,000 scientists, 67,000 doctors and 22,000 dentists, 14 future Nobel laureates, two dozen Pulitzer Prize winners, three Supreme Court justices and three presidents of the United States. Loans enabled by the bill also boosted the housing market, raising home ownership from 44 percent before the war to 60 percent by 1956. Rather than costing the government, the GI Bill turned out to be one of the best investments it ever made. The legislation is estimated to have cost $50 billion in today’s dollars and to have returned $350 billion to the economy, a nearly sevenfold return.
That educational feat could be repeated today. The government could fund a public education program, as Lincoln did, by simply issuing the money or having the central bank issue it as a form of “quantitative easing for people.” Infrastructure funded with government-issued U.S. notes in the 1860s included not only the transcontinental railroad, but also the system of free colleges and universities established through federal land grants.
This woman is a standard Lefty. Her recommended models are European welfare states.
Meanwhile, university tuition is still free in many countries in Europe, including Denmark, Estonia, Finland, Germany, Norway, Slovak Republic, Slovenia, Sweden and Turkey. But providing an affordable education for the next generation is evidently not a priority with our government. Only 3 percent of the federal budget is spent on education—not just for college loans, but for school programs of all sorts, from kindergarten through graduate school. Compare that with the outlay for military spending, including the Veterans Affairs and other defense-related departments, which consume more than half the federal budget and is an obvious place to cut. But there are no signs that our government is moving in that direction.
She never bothers to mention this crucial fact: median college debt is around $13,000. By median debt, I mean debt that is right in the middle: half the debtors owe more, and half owe less. In other words, it's about the amount of debt that somebody takes on to buy a used car.
Reporters cite higher levels of debt. They cite average debt. Average debt is skewed upward: Pareto's 20/80 distribution. About half of college graduates owe $20,000. This means that half owe less. Average debt is about $30,000. Here was reality in 2013. It has not changed much.
Research by Beth Akers and Matthew Chingos at The Brookings Institution revealed much about the student loan debt reality. While the average student loan balance is $29,000, that is only for the minority of people with any student loans (36 percent of those between 20 and 40). In other words, most young people have no student loan debt. Also, the average balance is greatly inflated by the presence of a few people with large balances. In fact, only four percent of households headed by people between 20 and 40 years old have student loan debt of over $36,000 per person and two-thirds of those have a graduate degree to show for that debt.
In short, $30,000 is the amount of debt that a family accepts to buy a new minivan. The lifetime economic return on a new minivan is a lot less than the lifetime economic return on a B.A. degree, even in sociology.
Ellen Brown, in the name of a level of debt equivalent to buying a used car, wants to socialize all of American higher education. This can be done free of charge, she says. Congress will not have to raise taxes to fund this. She maintains this position because she also argues that it really isn't taxation when the United States Congress prints pieces of paper with Presidents' pictures on them, and then spends this newly counterfeited money on government projects. This is really something for nothing. This is the gravy train of the welfare state. Some conservatives nod their heads in agreement. She speaks for them.
I regard this as a clear indication that portions of the conservative movement are intellectually adrift. The fact that this woman gets a hearing in any conservative circles indicates that some conservatives can't distinguish liberty from the welfare state. It's all the same to them.
I hope it is not all the same to you.
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Update, January 8, 2018
Brown wrote on January 7 in The Huffington Post:
The public banking movement is now gaining ground in cities and states across the country. A number of cities have passed resolutions to pull their money out of Wall Street banks that practice fraud as a business model. In New Jersey, Governor-elect Phil Murphy has made a state-owned bank the funding basis of his platform, with student loans one of three sectors he intends to focus on. If that succeeds, other states can be expected to follow suit.We need to free our students from the system of debt slavery that has financialized education, turning it from an investment in human capital into a tool for exploiting the young for the benefit of private investors. State-owned banks can make the loan process fair, equitable and affordable; but their creation will be fought by big bank lobbyists. An organized student movement could be an effective counter-lobby. Historically, debt and austerity have been used as control mechanisms for subduing the people. It is time for the people to unite and take back their power.