“Sucker-ifying” America

 

The great moral hazard of socialism and similar (involuntary) wealth distribution schemes is that eventually, people who resist taking other people’s wealth view themselves as “suckers”. Nobody wants to be a sucker, a chump.

What stimulated this thought was a post by Ann Althouse regarding the gift billionaire, Robert F. Smith, is making to the graduating class of Morehouse College. Ann’s comment was:

Am I the only one whose first thoughts were about the parents of students who’d sacrificed to pay the expenses of their kids and keep them free of debt?

And there it is. Those parents were suckers. They thought that by living disciplined lives and providing for their children that they were providing those children with advantages. Oh, excuse me, the now correct term is “privilege” not “advantage.” Advantage is earned difference. We don’t recognize that anymore.

Does this mean that there is no place for charity? No, but the charity needs to be individual, targeted, and received by the beneficiary with gratitude that does not morph into entitlement. Don’t you love that as soon as Smith’s gift to the Morehouse graduates was reported, someone was after Oprah for not doing the same thing at her commencement address at Colorado College?

There is a problem with the cost and value of Higher Education today. There is a problem with the cost and value of many things today. But we need to find our way through without finding “sugar daddies” or plundering the wealth of others. And most importantly, we cannot devalue earned advantage from our parents or ourselves.

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There are 29 comments.

  1. DonG Coolidge

    Rodin: Am I the only one whose first thoughts were about the parents of students who’d sacrificed to pay the expenses of their kids and keep them free of debt?

    That was my first thought, since college loan bailout has been in the news lately. It would be a happier ending, if they guy gave the job offers or seed money for start-ups. Paying off the loans is less interesting than building a great fountain.

    • #1
    • May 21, 2019, at 8:38 AM PDT
    • 5 likes
  2. Bryan G. Stephens Thatcher

    It was the first thing that popped into my head: What about the parents or students who did it the hard way. 

    • #2
    • May 21, 2019, at 8:45 AM PDT
    • 7 likes
  3. Susan Quinn Contributor

    Smith also asked the students to “pay it forward.” I’ll bet they can’t wait to do that–using someone else’s money, probably.

    • #3
    • May 21, 2019, at 8:46 AM PDT
    • 6 likes
  4. Kay of MT Member

    When I was a girl, back in the ’50s, most tuition for colleges were minimal, mostly student fees and books. In CA Jr. colleges were free. Tuition have become a scam, and a cost of a text book in the hundreds of $$. One of my grandsons is left with $60,000 in debt for his BS and is now working to pay that debt before going on to obtain his masters. I understand parents wanting their children to start life without this tremendous burden. Is my grandson better off paying his school debt before he obtains a masters and PHd? He may be 40 years old before he begins to practice.

    • #4
    • May 21, 2019, at 9:05 AM PDT
    • 6 likes
  5. Retail Lawyer Member

    My first thought also. Second thought was that this will encourage an unreasonable hope that something – anything will bail out indebted students. The bourgeoisie values of saving, planning, deferring and evaluating will be seen as something only suckers do.

    The upside is drawing attention to the very real student debt disaster, which will take some time and strategy to unwind. My thoughts on where to begin that project center on making college a non-luxury good and do away with non-productive administrators.

    • #5
    • May 21, 2019, at 9:17 AM PDT
    • 6 likes
  6. I Walton Member

    The free stuff handed out is just the price the elite have to pay to get the big take. Recipients learn fairly quickly that it’s not enough or pays for stuff of decreasing value and demand more. That works for a chunk of the political elite and their richest supporters for a long time, at least a shrinking chunk of them. Even those who oppose the scam when they take power don’t change it, at least not its direction and nature because a large bunch of the folks think they’re getting free stuff. It all ends badly, it’s where the third world comes from, but now that countries are really much wealthier we don’t know how it all ends, or how long it lasts, but it can’t end well. Rome reversed matters late in the game for a while, but reached the same end. Can we stop it? Good question. Some are beginning to understand that Washington is the problem and must always be the problem as it can extract wealth from everyone in the cities, towns and states then give it back to some in the states or hand it out to the sources of their own wealth. It’s more complex and spread out in the US, but it’s the same process that has ended every civilization from the beginning.

    • #6
    • May 21, 2019, at 9:25 AM PDT
    • 3 likes
  7. Addiction Is A Choice Member

    “Ah, yes, my little chickadee, on this glorious day of effulgent sunshine, the United States, in its infinite and immeasurable wisdom, has finally adopted a motto I can drink to: Never give a sucker an even break!”

    • #7
    • May 21, 2019, at 9:35 AM PDT
    • 5 likes
  8. Guruforhire Member

    Isn’t this why the parable of the prodigal son sticks in the craw so much?

    • #8
    • May 21, 2019, at 9:40 AM PDT
    • 10 likes
  9. Jerry Giordano (Arizona Patrio… Member

    Guruforhire (View Comment):

    Isn’t this why the parable of the prodigal son sticks in the craw so much?

    Yes, and the parable of the workers in the vineyard too.

    • #9
    • May 21, 2019, at 10:58 AM PDT
    • 7 likes
  10. Full Size Tabby Member

    I occasionally worry that this sucker effect could also affect the retirement phase (where I just entered), and that it will turn out I was a sucker for saving for retirement.

    I (well, more accurately, Mrs. Tabby who manages the household spending) have saved up a tidy sum that we invested and now rely on for living in our retirement years. No where near the amount that the politicians are currently using as the threshold for “wealth taxes,” but we know that once such a tax is enacted, the threshold will be reduced, probably until it captures our retirement fund. Especially when Social Security runs dry (when the amount called for to pay off old people exceeds the taxes that can be extracted from current workers). The product of my diligence will be used to pay off people who were not so diligent. 

    • #10
    • May 21, 2019, at 12:12 PM PDT
    • 11 likes
  11. Susan Quinn Contributor

    Full Size Tabby (View Comment):

    I occasionally worry that this sucker effect could also affect the retirement phase (where I just entered), and that it will turn out I was a sucker for saving for retirement.

    I (well, more accurately, Mrs. Tabby who manages the household spending) have saved up a tidy sum that we invested and now rely on for living in our retirement years. No where near the amount that the politicians are currently using as the threshold for “wealth taxes,” but we know that once such a tax is enacted, the threshold will be reduced, probably until it captures our retirement fund. Especially when Social Security runs dry (when the amount called for to pay off old people exceeds the taxes that can be extracted from current workers). The product of my diligence will be used to pay off people who were not so diligent.

    @fullsizetabby, are those funds in some type of IRA account? I can’t imagine they’d include those funds in “”wealth taxes.” We are in your shoes and we get taxed when we withdraw the funds, but I don’t think those will be included. Then again . . .

    • #11
    • May 21, 2019, at 12:17 PM PDT
    • 3 likes
  12. DonG Coolidge

    Full Size Tabby (View Comment):
    Especially when Social Security runs dry (when the amount called for to pay off old people exceeds the taxes that can be extracted from current workers).

    FYI, we are past the point where SS payouts exceed tax revenue. Interest on the “trust fund” will fill the gap until 2035.

    • #12
    • May 21, 2019, at 2:10 PM PDT
    • 2 likes
  13. Full Size Tabby Member

    Susan Quinn (View Comment):

    Full Size Tabby (View Comment):

    I occasionally worry that this sucker effect could also affect the retirement phase (where I just entered), and that it will turn out I was a sucker for saving for retirement.

    I (well, more accurately, Mrs. Tabby who manages the household spending) have saved up a tidy sum that we invested and now rely on for living in our retirement years. No where near the amount that the politicians are currently using as the threshold for “wealth taxes,” but we know that once such a tax is enacted, the threshold will be reduced, probably until it captures our retirement fund. Especially when Social Security runs dry (when the amount called for to pay off old people exceeds the taxes that can be extracted from current workers). The product of my diligence will be used to pay off people who were not so diligent.

    @fullsizetabby, are those funds in some type of IRA account? I can’t imagine they’d include those funds in “”wealth taxes.” We are in your shoes and we get taxed when we withdraw the funds, but I don’t think those will be included. Then again . . .

    Sen. Warren has proposed a wealth tax that taxes wealth on which an income tax has already been paid. I can’t think of any conceptual reason Congress cannot choose to tax wealth held in an IRA. The argument for taxing the value of an IRA may even be stronger, since income tax was not paid on the money that went into it. Sure, income tax is paid as we pull money out, but that’s the future, and Congress often wants the money now, not later.

    The overall point remains what was noted in the OP – when we take actions that disfavor thrift (paying off someone else’s debt, tax someone else’s savings) we risk giving people the idea that they would be suckers to save and to live within their means. 

    • #13
    • May 21, 2019, at 2:39 PM PDT
    • 4 likes
  14. TBA Coolidge
    TBA

    At least it’s his own money he is wasting. 

    • #14
    • May 21, 2019, at 9:03 PM PDT
    • 2 likes
  15. Miffed White Male Member

    Susan Quinn (View Comment):

    Full Size Tabby (View Comment):

    I occasionally worry that this sucker effect could also affect the retirement phase (where I just entered), and that it will turn out I was a sucker for saving for retirement.

    I (well, more accurately, Mrs. Tabby who manages the household spending) have saved up a tidy sum that we invested and now rely on for living in our retirement years. No where near the amount that the politicians are currently using as the threshold for “wealth taxes,” but we know that once such a tax is enacted, the threshold will be reduced, probably until it captures our retirement fund. Especially when Social Security runs dry (when the amount called for to pay off old people exceeds the taxes that can be extracted from current workers). The product of my diligence will be used to pay off people who were not so diligent.

    @fullsizetabby, are those funds in some type of IRA account? I can’t imagine they’d include those funds in “”wealth taxes.” We are in your shoes and we get taxed when we withdraw the funds, but I don’t think those will be included. Then again . . .

    You “can’t imagine” it? You need to work on your imagination. I can’t imagine they won’t.

    It’s why I won’t contribute to a Roth IRA or Roth 401k anymore, even though I’m pretty convinced tax rates will be substantially higher in the future than they are now. I don’t trust the Weasels in Washington* to keep their promise to allow tax-free withdrawals. And I’m not going to pay current rates and future rates too.

    *Weasels in Washington would be a great name for a rock band.

    • #15
    • May 22, 2019, at 4:59 AM PDT
    • 3 likes
  16. Kay of MT Member

    Would turning into cash and putting it under your mattress be safer?

    • #16
    • May 22, 2019, at 5:51 AM PDT
    • 2 likes
  17. Full Size Tabby Member

    Miffed White Male (View Comment):

    Susan Quinn (View Comment):

    Full Size Tabby (View Comment):

    I occasionally worry that this sucker effect could also affect the retirement phase (where I just entered), and that it will turn out I was a sucker for saving for retirement.

    I (well, more accurately, Mrs. Tabby who manages the household spending) have saved up a tidy sum that we invested and now rely on for living in our retirement years. No where near the amount that the politicians are currently using as the threshold for “wealth taxes,” but we know that once such a tax is enacted, the threshold will be reduced, probably until it captures our retirement fund. Especially when Social Security runs dry (when the amount called for to pay off old people exceeds the taxes that can be extracted from current workers). The product of my diligence will be used to pay off people who were not so diligent.

    @fullsizetabby, are those funds in some type of IRA account? I can’t imagine they’d include those funds in “”wealth taxes.” We are in your shoes and we get taxed when we withdraw the funds, but I don’t think those will be included. Then again . . .

    You “can’t imagine” it? You need to work on your imagination. I can’t imagine they won’t.

    It’s why I won’t contribute to a Roth IRA or Roth 401k anymore, even though I’m pretty convinced tax rates will be substantially higher in the future than they are now. I don’t trust the Weasels in Washington* to keep their promise to allow tax-free withdrawals. And I’m not going to pay current rates and future rates too.

    *Weasels in Washington would be a great name for a rock band.

    Oops! I meant “can imagine. Editing error when I restructured the sentence. Yes, any money anywhere is potential for Congress to claim for taxes. 

    I am surprised that Congress isn’t already taxing withdrawals from Roth IRA’s. I never set one up because I was confident that Congress would find them too tempting and tax away the designed benefits. 

    • #17
    • May 22, 2019, at 6:08 AM PDT
    • 3 likes
  18. Rodin Member
    Rodin Post author

    No man’s life, liberty, or property are safe while the legislature is in session.Judge Gideon Tucker

    • #18
    • May 22, 2019, at 7:04 AM PDT
    • 5 likes
  19. Bill Nelson Member

    My first thought was about the pride of the the individual. As a graduated student, I would consider myself fully able to pay my debts.

    If my children came to me today and offered to pay off any remaining debt, I would not accept. It’s mine, I own it, I am responsible, I am capable.

     

    • #19
    • May 22, 2019, at 1:37 PM PDT
    • 3 likes
  20. OccupantCDN Coolidge

    From an episode of the West Wing that aired in 2002:

     

    • #20
    • May 22, 2019, at 4:10 PM PDT
    • 1 like
  21. MarciN Member

    I think that what Robert Smith did for those students was magnificent. It will result in a group of young people who just got an early release from debt. They will take that energy into their immediate life after college, and many of them will do great things because of it.

    Postgraduate education has ballooned in price even more than undergraduate education. Look at those costs and then look at how many years of graduate-level education the average operating room nurse has to have. It’s pretty wild. If we want professionals in our communities, we need to figure out how to make that happen financially.

    Frankly, I’d rather see American students get some breaks so as to enable them to attend our top graduate schools than give those graduate school spots to students from foreign countries, which is how many of the universities are presently keeping their expensive graduate schools in black ink.

    When I hear the term “white male privilege,” the three people who come to my mind immediately are Ted Kennedy, Al Gore, and John Kerry, and those three people have done unfathomable harm to this country and the entire world. I don’t want to live in a world where only Ted Kennedy, Al Gore, and John Kerry can afford to go to college and graduate school. Thank goodness, in postwar America, the top schools, to their credit, have been aggressive in trying to enable lower-income students to get a college education. I am happy to think of Thomas Sowell as a graduate of a top American college and university.

    I spent a lot of my volunteer life with middle school and high school student musicians. The most interesting lesson I learned from doing that was that the kids from the lower-income families in our community had time to practice their instruments. The wealthier kids’ families were so busy with expensive boating and skiing activities that those kids really didn’t have time to work on perfecting their artistic or athletic skills. They did not have afternoon time for practice. I am really glad the music education our kids got helped them get into good schools and in some cases, helped a few of them earn much-needed scholarships and grants. They didn’t have money, but they had time and dreams. :-)

    I’m sorry the parents of the kids who didn’t take out loans didn’t get this break too. However, I am sure that the world their kids will inhabit over the course of their children’s lifetime will be better because of Smith’s gift. So those parents will get something out of it.

    • #21
    • May 23, 2019, at 8:29 AM PDT
    • 4 likes
  22. Miffed White Male Member

    MarciN (View Comment):

    I think that what Robert Smith did for those students was magnificent. It will result in a group of young people who just got an early release from debt. They will take that energy into their immediate life after college, and many of them will do great things because of it.

    Postgraduate education has ballooned in price even more than undergraduate education. Look at those costs and then look at how many years of graduate-level education the average operating room nurse has to have. It’s pretty wild. If we want professionals in our communities, we need to figure out how to make that happen financially. 

    There’s a big difference between scholarships and/or price reductions up front, and random debt relief after the fact.

    The random debt relief punishes the people who did it “right”.

     

    • #22
    • May 23, 2019, at 8:44 AM PDT
    • 2 likes
  23. MarciN Member

    Miffed White Male (View Comment):
    The random debt relief punishes the people who did it “right”.

    I understand what you’re saying, but this wasn’t the school or the government making this gift. It’s not a punishment of those parents who did it right. It’s more like your neighbor winning the lottery. It was a luck-of-the-draw kind of moment. Right place, right time. 

    • #23
    • May 23, 2019, at 8:53 AM PDT
    • 3 likes
  24. Miffed White Male Member

    MarciN (View Comment):

    Miffed White Male (View Comment):
    The random debt relief punishes the people who did it “right”.

    I understand what you’re saying, but this wasn’t the school or the government making this gift. It’s not a punishment of those parents who did it right. It’s more like your neighbor winning the lottery. It was a luck-of-the-draw kind of moment. Right place, right time.

    Except this is going to help reinforce the demand for universal debt relief.

     

    • #24
    • May 23, 2019, at 8:57 AM PDT
    • 4 likes
  25. MarciN Member

    Miffed White Male (View Comment):

    MarciN (View Comment):

    Miffed White Male (View Comment):
    The random debt relief punishes the people who did it “right”.

    I understand what you’re saying, but this wasn’t the school or the government making this gift. It’s not a punishment of those parents who did it right. It’s more like your neighbor winning the lottery. It was a luck-of-the-draw kind of moment. Right place, right time.

    Except this is going to help reinforce the demand for universal debt relief.

     

    I do agree with that. Yup. 

    I am sorry about that. Let no good deed be unpunished. 

    But even though I know that will happen, I remain happy for those students, and I think it was a good thing. I don’t think any private citizen should withhold charity because he or she can’t give the gift to every person who needs it. That’s not the right answer. 

     

    • #25
    • May 23, 2019, at 9:14 AM PDT
    • 4 likes
  26. Bill Nelson Member

    Miffed White Male (View Comment):
    Except this is going to help reinforce the demand for universal debt relief.

    What expectation does it set for those whose debt was covered?

     

    • #26
    • May 23, 2019, at 10:54 AM PDT
    • 2 likes
  27. TBA Coolidge
    TBA

    Miffed White Male (View Comment):

    MarciN (View Comment):

    Miffed White Male (View Comment):
    The random debt relief punishes the people who did it “right”.

    I understand what you’re saying, but this wasn’t the school or the government making this gift. It’s not a punishment of those parents who did it right. It’s more like your neighbor winning the lottery. It was a luck-of-the-draw kind of moment. Right place, right time.

    Except this is going to help reinforce the demand for universal debt relief.

    It might not. If the example is a rich guy doing it and getting kudos, perhaps some other rich guys will follow suit. 

    The criticism of Oprah for not having done the same is unfair, but it occurs to me that rich people donate facilities to colleges all the time – facilities that do virtually nothing for education as such – perhaps there should be some social pressure on the very rich to put money into learning as opposed to edifice. Churches put pressure on the rich to donate as a matter of course. As long as force ‘n’ guns ‘n’ jail aren’t part of the deal, it’s not a violation of anything but decorum. 

    If literature is any guide (it often isn’t) some landed gentry used to send their servants’ children to good schools as well as their own kids to give them a better place in the world. I would add here that when government pays out money the beneficiaries tend to believe they are owed it in the first place, and do not tend to maximize its use; ungrateful students with stupid degrees, and institutions that become sclerotic and weak. When rich people – particularly retired rich people – do something with their money, they keep an eye on it and reallocate it when the beneficiaries waste it. We could do with more of that. 

    • #27
    • May 23, 2019, at 6:06 PM PDT
    • 2 likes
  28. MarciN Member

    TBA (View Comment):

    Miffed White Male (View Comment):

    MarciN (View Comment):

    Miffed White Male (View Comment):
    The random debt relief punishes the people who did it “right”.

    I understand what you’re saying, but this wasn’t the school or the government making this gift. It’s not a punishment of those parents who did it right. It’s more like your neighbor winning the lottery. It was a luck-of-the-draw kind of moment. Right place, right time.

    Except this is going to help reinforce the demand for universal debt relief.

    It might not. If the example is a rich guy doing it and getting kudos, perhaps some other rich guys will follow suit.

    The criticism of Oprah for not having done the same is unfair, but it occurs to me that rich people donate facilities to colleges all the time – facilities that do virtually nothing for education as such – perhaps there should be some social pressure on the very rich to put money into learning as opposed to edifice. Churches put pressure on the rich to donate as a matter of course. As long as force ‘n’ guns ‘n’ jail aren’t part of the deal, it’s not a violation of anything but decorum.

    If literature is any guide (it often isn’t) some landed gentry used to send their servants’ children to good schools as well as their own kids to give them a better place in the world. I would add here that when government pays out money the beneficiaries tend to believe they are owed it in the first place, and do not tend to maximize its use; ungrateful students with stupid degrees, and institutions that become sclerotic and weak. When rich people – particularly retired rich people – do something with their money, they keep an eye on it and reallocate it when the beneficiaries waste it. We could do with more of that.

    I agree with every single sentence you wrote here. :-)

    • #28
    • May 23, 2019, at 6:15 PM PDT
    • 3 likes
  29. TBA Coolidge
    TBA

    MarciN (View Comment):

    TBA (View Comment):

    Miffed White Male (View Comment):

    MarciN (View Comment):

    Miffed White Male (View Comment):
    The random debt relief punishes the people who did it “right”.

    I understand what you’re saying, but this wasn’t the school or the government making this gift. It’s not a punishment of those parents who did it right. It’s more like your neighbor winning the lottery. It was a luck-of-the-draw kind of moment. Right place, right time.

    Except this is going to help reinforce the demand for universal debt relief.

    It might not. If the example is a rich guy doing it and getting kudos, perhaps some other rich guys will follow suit.

    The criticism of Oprah for not having done the same is unfair, but it occurs to me that rich people donate facilities to colleges all the time – facilities that do virtually nothing for education as such – perhaps there should be some social pressure on the very rich to put money into learning as opposed to edifice. Churches put pressure on the rich to donate as a matter of course. As long as force ‘n’ guns ‘n’ jail aren’t part of the deal, it’s not a violation of anything but decorum.

    If literature is any guide (it often isn’t) some landed gentry used to send their servants’ children to good schools as well as their own kids to give them a better place in the world. I would add here that when government pays out money the beneficiaries tend to believe they are owed it in the first place, and do not tend to maximize its use; ungrateful students with stupid degrees, and institutions that become sclerotic and weak. When rich people – particularly retired rich people – do something with their money, they keep an eye on it and reallocate it when the beneficiaries waste it. We could do with more of that.

    I agree with every single sentence you wrote here. :-)

    It’s a good habit for you to get in to. ;) 

    • #29
    • May 23, 2019, at 6:20 PM PDT
    • 3 likes