U. Maryland Students Examine Crisis On Wall Street

This story was written by Allison Stice, The Diamondback


The University of Maryland's Students for a Democratic Society explained the government bailout of major financial institutions last night with skits and slides, outlining how the problem started and suggesting activism to keep education from being the first on the chopping block when the crisis paralyzes state government spending.

Titled "What the F--- happened?," a name organizers said probably contributed to the 50-person turnout. The talk featured stark criticism of bankers for predatory lending practices, the government for refusing to regulate markets and mortgages and the bailout plan for stealing taxpayer money without creating jobs. Presenters hinted that better solutions were shot down for being too socialist, like a Dennis Kucinich-led plan that authorized $700 billion but allowed taxpayers to own part of the corporations their dollars were bailing out.

Skits documented the crescendo of the crisis, starting a few years back. SDS members played a lender, a credit-firm rater, an investor, a pension fund investor and the government. The shady lender pushed mortgages with a joyous, "I won't check your income, you don't need a job, just sign here!" Bad mortgages were bundled into mortgage-backed securities, given a 100-percent guarantee of money back by an overzealous rater who doled out triple-A scores and bought by investors who sold it to pension fund holders, all to the tune of "There's no way they'll all fail at once!" When just that happened, the investor sidled up to the government with a shy, "You got any cash on you? I'm short."

"How about $700 billion?" the government offered.

"Thank goodness I didn't have to pay the consequences for my actions!" the investor cried.

"Campaign contributions are on you!" the government laughed as the two sauntered out to lunch.

Political cartoons flashed on the screen behind sophomore American studies major Jon Berger, an SDS leader, as he denounced the bailout as a "huge theft of our taxes to pay off corporations that f---ed up, and saving them but not saving us."

Some in attendance wondered if the consumer was responsible for failing to borrow within their means. Presenters replied contracts are tricky and the sheer size of the problem proves that it's a social and not an individual problem.

The bailout, which was approved Friday along with millions in pork projects, had support from both parties, including yeas from Sen. Barack Obama, D-Ill., Sen. John McCain, R-Ariz., and Sen. Joe Biden, D-Del. The credit crisis rippled throughout the world, causing Germany - Europe's biggest economy - to consider a similar bailout. Conservatives labeled the measure socialist. No one knows when the bailout will start or what assets will be bought. And no one sees the corporations complaining about the violation of the free market, Berger said.

SDS tried to lay out the presentation in a politically neutral way, but, "that's not who we are, so it wouldn't be honest. We have an agenda, we might as well say it," Berger said. SDS members said they don't think student voters understand the financial crisis or the bailout plan, nor do they understand how it will affect their ability to pay off student loans in the next five years.

Historically, SDS has been a part of the New Left instead of calling itself a socialist group, partly because the negative connotations of socialism in America, Berger said.

The facts expressed throughout the night were checked by government and politics professor Joe Oppenheimer, who has also worked as an economics professor. Instead of objectivity, the group choose to emphasize its analysis of the situation, said SDS member Bob Hayes, a sophomore mechanical engineering major.

SDS told the packed room that the economic crisis would make banks hesitate to grant student loans and that public education could suffer. Presenters extolled the importance of keeping the government accountable and fighting to defend the state's three-year tuition freeze. Senior government and politics major Amy Dewan, who attends SDS meetings occasionally, said her teaching assistant Zein El Amine of the arts and humanities college told her two students had already dropped out of school since the crisis became full-blown, when their parents lost their tuition savings on the market.

"I don't think there is going to be a tuition freeze. I'd be surprised if it didn't go up," Dewan said. "I'm surprised there aren't riots and there haven't been protests in the streets. I think that to some extent there should be."

Senior accounting major Charles Ferry said his classes have been covering the crisis in detail, and he knew going into to the talk to expect a little bias from SDS.

"We can't worry about who's to blame, if it was [President George W.] Bush, [former Chairman of the Federal Reserve Alan] Greenspan or anyone else down the line. We have to figure out what to do," he said. "You can't borrow any money anymore because the whole thing is based on credit. ... I mean, if companies can't afford their payroll, that's huge."

In any case, a tuition freeze is not an issue divided along party lines, Berger said, adding that SDS will be organizing rallies and protests in the future. The group is working with Community Roots, which will address part two by exploring the effect of the bailout on students and delving into the global credit crisis at their regular meeting time on Thursday, fueled by questions the audience members may have had left over from the event yesterday, said co-President Steve Jackson, a senior American studies major.

sticedbk@gmail.com
  • CBSNews

Comments

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.