Markers of Inequality

Something I really appreciate about my sports journalism professor Alan Abrahamson is that he cares. Since administrators decided to shutdown USC's physical campus because of Coronavirus, he has spent the opening of each online class checking in with each student to see how they are doing.

One of Abrahamson's sayings is #MOTO. It stands for master of the obvious. As journalists we should ask the obvious questions and say what's obvious, even, and especially when it's uncomfortable to do so. Practicing #MOTO while listening to each student share how they are doing has made one thing very obvious: this crisis is affecting students from wealthy and low-income backgrounds very differently.

For some low-income students, it has accelerated questions about the value of a $50,000-plus debt-financed degree in a low-paying field. They've pondered asking for a tuition refund, filed for a parking pass reimbursement, and shared concern about losing employment at side jobs that pay low hourly wages.

Others simply aren’t confronting – or, to be precise, being forced to confront – these same sorts of issues. Especially if, say, they are at home, with mom and dad.

Observing the varying responses of my classmates has helped me better understand USC for what it is. Yes, it's the University of Spoiled Children, but it's also in the heart of low-income South LA. With the generosity of wealthy donors, it's where need-based scholarship students from low-income backgrounds collide with the children of LA's wealthy elite.

Class with Professor Abrahamson has been a microcosm of that reality, I think, in a good way, giving me and other students the opportunity at a young age to explore outside of what we were born into and grapple with the larger reality of inequality in our world.

With Coronavirus bringing that reality into sharp focus, the emotion I've felt most is shock. Shock that airlines, which spent $45 billion on share buybacks since 2010 to enrich executives, have received more than $50 billion in aid. Shock that Americans receive only a $1,200 check when the $6 trillion in bailout money equates to more than $17,000 for each American. Shock that $350 billion in "small business loans," are actually grants (it's not a loan if you don't have to pay it back). And shock that wealthy business owners like Robert Kiyosaki, author of the all-time best seller, Rich Dad, Poor Dad, are openly flaunting they applied for those grants not because they "need the money," but so that they can become richer.

Simple question: why do business owners like Kiyosaki get these benefits when millions of non-business owning Americans are receiving a mere $1,200 check for the price of losing their job? Why are credit card interests rates at all-time highs of more than 19%, when the Federal Reserve is providing banks access to near zero-percent interest rates?

It's because our country's trillion dollar aid packages have become a vehicle to privatize profits and socialize losses. #MOTO check: Under such policy the U.S. is no longer a capitalist economy.

Capitalism presumes risk. It means if you own a stock, the stock can go to zero. For those who don't know, stocks are equity. Equity is unsecured. That means there's nothing to compensate you if the company goes bankrupt. For example, if United Airlines were to file for bankruptcy, United's lenders would acquire the company (it's airplanes and people), not the stockholders. That's because United defaulted and couldn't make payment to its lenders, not stockholders (which are merely shares of ownership, in a now worthless company).

But today, instead of letting United default to its lenders like in the olden days, the government is giving it part of the $50 billion aid package for airlines referenced above. #MOTO check: I don't see that same generosity for my fellow students drowning in student debt.

Of the more than $6 trillion in new money flowing into the economy, none of it will go directly towards paying off the more than $1.6 trillion in outstanding student loan debt. From my conservative viewpoint, each passing day the government hands out trillions to the wealthy is another where the argument that student loans shouldn't be forgiven loses credibility.

Appearing on CNBC Thursday, Social Capital CEO Chamath Palihapitiya argued as much yet host Scott Wapner seemed incapable of understanding Palihapitiya's view. Watch below:

As someone with a middle-and then upper-middle class background, who went to state school to avoid student loans, (I can remember my parents telling me to not even bother applying to USC), I cannot imagine the burden my fellow students must be facing. I was one of the lucky ones. If my undergraduate degree in finance taught me one thing it was this: avoid student debt like the plague.

When I applied to journalism graduate school last year, I knew I would not attend without anything less than a half scholarship. Any more debt than that and the risk-reward was simply not there. Even for my dreams.

Last week in class, Professor Abrahamson delivered a similarly blunt message.

"You may be best working outside of journalism to take care of yourself financially," he said, "then return to it later."

“History reports that the men who can manage men manage the men who can manage only things, and the men who can manage money manage all.”

―Will Durant, The Lessons of History, (Published 1968)