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Not Getting What they Paid For

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Don’t say James Madison didn’t warn us.

“A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views,” he wrote in Federalist #10.

Simply, those who own property, run businesses or work in finance are going to earn more money than those who work for them. These two classes are going to have different interests and vote accordingly.

Madison explains that’s why the Framers drafted the Constitution to create a republic. Under true democracy, it would be easy for the majority (workers) to vote to take property from the minority (owners). A republic helps diffuse such passions.

“The last thing you would want to do in any kind of sensible society is to have a set of rules in which one man/one vote dictates over every issue,” is how law professor Richard Epstein put it on PBS. “And the last thing we need is a popular democracy in which one man/one vote and which you can have select taxes on people, because once you can have selected taxes on certain people, why not go along and say, you know, this is a wonderful mansion that Mr. Gates owns, what we ought to do is just take it and sell it off to some foreign sheik, and take the money and divide it amongst ourselves?”

Further, Madison warned: “Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination.”

Which brings one to the Occupy Wall Street movement.

“Student-loan debt has continued to grow despite a financial crisis that constrained credit elsewhere, and the increasing burden amid high unemployment is driving at least part of the protests among the Occupy Wall Street movement,” writes Mary Pilon in the Wall Street Journal.

MSNBC’s Petra Cahill adds that recently, “New York University professor Andrew Ross led a discussion about the burden of student loan debt — now estimated to be between $550 billion and $829 billion — and proposed a radical solution: ‘A Pledge of Refusal.’ The idea is that protesters would sign a pledge to stop making payments on their student loans as soon as 1 million had joined in making the pledge.”

It may be worth noting here that in 2010 the federal government squeezed out the private lenders that once provided student loans. So the money that students must pay back may actually be owed to taxpayers, not Wall Street bankers.

As Annie Hsiao noted at National Review online, this is proving to be a profitable undertaking for Washington. “The federal government is currently lending to students at an interest rate of 6.8 percent while it is borrowing at less than 1 percent, and the difference is kept by the federal government and spent on other programs,” she wrote. Maybe OWS is misplacing its anger by aiming it at bankers. It should, it seems, be focused on federal policymakers.

These students have another reason to be upset, of course. They’re paying more than ever, but it’s far from clear they’re a good education in return for their money.

In 2006 and ’07, the Intercollegiate Studies Institute gave a 60-question exam about American history to some 28,000 freshmen and seniors at 80 schools of higher education. “In both years, the average freshman and senior failed the exam,” ISI reported. Furthermore, after four years in college, seniors: “are no better off than when they arrived in terms of acquiring the knowledge necessary for informed engagement in a democratic republic and global economy.”

This may help explain why many in the Occupy movement don’t even seem to know what they’re protesting about.

New York magazine (no conservative publication) asked some OWSers questions. “[W]hen asked to identify Dodd-Frank–not to give a detailed description of its provisions, but only to say generally what it relates to–more than 80 percent had no idea, and many of the rest were wrong,” notes John Hinderaker at Powerline. The protesters also struck out when trying to identify current marginal income tax rates and what the government actually spends our money on.

Madison warned about groups such as OWS. “By a faction, I understand a number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community,” he wrote.

Occupy Wall Street can exist because our Constitution protects the right to free speech. Yet that same Constitution protects the rest of us by limiting what the OWS minority is able to accomplish. Just two more reasons to be thankful for the brilliance of the Framers, and the beauty and functionality of their creation.

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