Stephen Colbert and Philosophy - Aaron Allen Schiller [121]
Luring consumers able to “assume high debt loads” means that they are luring folks willing to go into serious long-term debt by taking out some major-league loans. Education, then, becomes an avenue by way of which consumers become indebted to corporate lenders. You see, according to the authors of the above business-speak, the corporate environment takes the aim of higher education to be that of making money. One way to do that is to get people to take out loans. But don’t these loans usually sport pretty low interest rates? Such loans wouldn’t be very profitable to service. So, in addition to instituting those profit centers, and to trading students (like so much cattle) for corporate contracts, the capitalist advises that we stop lending money to people for little or no profit.
As an example of how higher education looks when mimicking big business, take a look at PHEAA (Pennsylvania Higher Education Assistance Agency).196 PHEAA is a state agency responsible for providing and servicing loans to Pennsylvania residents headed for college. PHEAA just pulled from its shelves the providing and servicing of federal student loans. Why? According to James Preston, acting president of PHEAA, “Right now, it’s not at all profitable to finance” federal loan students. PHEAA acts as though it is a privatized provider and servicer of student loans. It doesn’t take its primary aim to be that of helping students afford college, but rather of making a profit off of students, to maximize profits for its shareholders (even though in being a public agency there are none!). His predecessor, Dick Willey (I’m not kidding), received over $400,000 in 2007, which included a bonus of over $180,000 that he gave to himself just before retiring. He also handed out over seven million dollars in bonuses to top PHEAA executives. Willey retired in August, and a month later Preston told Pennsylvania students that PHEAA was simply too strapped to provide federal loans to them. The bonuses given to executives would have put over 1,700 students through college. Here’s just one more invisible hand job that doesn’t have a happy ending.
The corporate model has turned university presidents into corporate CEOs. They’re paid the highest salaries, just like in corporations. Why? Well, I’m not sure, but it has something to do with how salaries are structured in the “real world.” Presidents and CEOs have to make more money than those they manage. It’s just a matter of logic they will tell you. Here’s how Dominic Basulto explains it:
[T]here’s strong evidence that, far from being paid too much, many CEOs are paid too little. Not only do the top managers of multibilliondollar corporations earn less than basketball players (LeBron James of the Cleveland Cavaliers makes $26 million), they are also outpaced in compensation by financial impresarios at hedge funds, private equity firms, and investment banks. Should we care? Yes. If other positions pay far more, then the best and the brightest minds will be drawn away from running major businesses to pursuits that may not be as socially useful—if not to the basketball court, then to money management.197
Basulto schools us on how “real world” business works. According to him, had Yahoo refused to pay Terry Semel $230.6 million, or had AIC/Inter-ActiveCorp refused to pay Barry Diller