Years ago, I heard an aphorism that really struck home for me, and I’ve applied a few times in my life:
If a friend owes you a hundred dollars and you never hear from him again, it was probably worth it.
I am reminded of that because yesterday a long-time member of the Wizbang community sent me this article from Mother Jones about Steven Katz, a guy who deliberately ran up almost $100,000 in debts, then fled to China. And now he specializes in telling other people who they, too, can get out of their debts to banks (without having to flee the country).
In the days before the internet, Katz’ fleeing would have been pretty much a blessing; he’s a scumbag, and we’re better off without him. Let him be China’s problem. But now he’s setting himself up as a hero to those people who have run up huge debts, and are desperate for a way out.
Yes, Katz says that the interest rates on his debts were jacked up without cause, and that happens to a lot of people. And it sucks. But that was all done within the limits of the law and the contract the lender signed with the borrower.
And further, the borrower willingly signed that agreement. And when they signed that agreement, they accepted those terms and pledged to repay the debt, along with all interest, fees, and whatnot spelled out.
This guy is no hero. This guy is a class-A weasel. The only reason folks think of him as anything admirable is he’s going after big, faceless corporations — which are pretty bad at PR of their own.
In a similar vein is this story about a law student whose situation is incredibly symbolic of the higher education bubble we’re going through. And it strikes a chord with me because I’ve had dealings with quite a few Vermont Law School students. For the most part, they’re nice folks, but heavily granola-flavored, if you catch my drift.
“John” graduated from college, but had a hard time making his way. He wanted to go to law school, but not only couldn’t afford it, but couldn’t support himself. He moved back in with his parents for a year, then was admitted to Vermont Law School and took out loans to cover his attendance. By the time he graduates he’ll owe about $130,000 in those loans.
At that point, he will have his legal degree in environmental law and be looking to work with a non-profit environmental organization. I’m no expert on such things, but I do watch “How I Met Your Mother” and one of the characters (Marshall, a lawyer) wanted to do just that — but took a corporate job to support his family. Later, he quit to take his dream job, and took a huge pay cut to do so. That, plus things I’ve read elsewhere, all confirm the notion that “environmental lawyer for a non-profit activist group” is not exactly a big bucks position.
Which makes me wonder just how the hell “John” intends to pay off that debt? Earlier, in a piece on education funding reform, I made a rather heretical suggestion:
Next, all students will be presented with a chart that compares their projected earnings over 20 years with their planned degree, along with the projected total student loan debt. If they want to rack up a quarter of a million dollars in debt so they can get a Ph.D. in Womyn’s Studies with a minor in Far Eastern Art History, they better have a plan to pay that back.
I wonder if John has done the math on those mounds of loan documents he put his name to.
Sorry, I thought I could type that with a straight face. I am pretty sure I know “John’s” plan — get the bank to forgive the loan, and just eat the loss. Or get the government to eat the loss. Which means that you and I have just given “John” his education, pretty much free and clear — and in return, we have another environmental activist with a law degree fighting against economic development. I can live with these people doing what they think right, but is there any particular reason I have to subsidize it, too?
My biggest fear about this situation is that “John,” once reality sinks in, takes Steven Katz’ advice and tries to figure some way to skip on his debt, rationalizing that he’s doing such important “good work” for the planet that it’s OK for him to renege on his contracts.
On the other hand, my biggest hope is that Mr. Katz — who, by this point, should be thoroughly blackballed from getting credit from any Western lender — runs afoul of China’s credit laws. Because since most everything there is owned by the government, and because Chinese laws (like most dictatorships) lean towards the draconian, I doubt he’d get away with skipping out from China as he did from the US.