The Higher Education Fiscal Crisis Protects the Wealthy

Police are arresting and attacking student protesters on University of California (UC) campuses again. “Why did he beat me I wasn’t doing anything,” screamed a young Cal Berkeley women student over KPFA radio on Friday evening November 20. Students are protesting the 32% increase in tuition imposed by the UC regents in a time of severe state deficits. The Board of Regents claims that they have no choice. Students will now have to pay over $10,000 in tuition annually for a public university education that was free only a few decades ago.

The corporate media spins the tuition protests as if we are all suffering during the recession. For example, the San Diego Union Tribune November 20 writes, “These students need a course in Reality 101. And the reality is that there is virtually no segment of American society that is not straining with the economic recession. With UC facing a $535 million budget gap due to state cuts, the regents have to confront reality and make tough choices. So should students.”

Yet, the reality is something quite different. Our current budget crisis in California and the rest of the country has been artificially created by cutting taxes on the wealthiest people and corporations. The corporate elites in the US, the top 1% who own close to half the wealth, are the beneficiaries of massive tax cuts over the past few decades. While at the same time working people are paying more through increased sales and use taxes and higher public college tuition.

The wealthy hide their money abroad. Rachel Keeler with Dollars & Sense reports that over the years, trillions of dollars in both corporate profits and personal wealth have migrated offshore in search of rock-bottom tax rates and the comfort of no questions asked. Offshore banks now harbor an estimated $11.5 trillion in individual wealth alone, and were a significant contributing factor to the international economic downturn in 2008.

According to the California Budget Project, tax cuts enacted in California, since 1993, cost the state $11.3 billion dollars annually. Had the state continued taxing corporations and the wealthy at rates equal to those fifteen years ago there would not be a budget crisis in California. Even though a budget deficit was evident last year, California income tax laws were changed in February of 2009 to provide corporations with even greater tax savings—equal to over $2 billion per year. California is similar to the rest of the country where the wealthy and corporate elites enjoy economic protection through increased costs to working people.

Higher education has been cut in twenty-eight states in the 2009-10 school year and further, even more drastic cuts, are likely in the years ahead. California State University (CSU) system is planning to reduce enrollments by 40,000 students in the fall of 2010. The CSU Trustees have imposed steep tuition hikes and forced faculty and staff to take non-paid furlough days equal to 10% of salaries.

The students who are protesting tuition increases know they are being ripped off. They know that we are bailing out the rich with hundreds of billions dollars for Wall Street and massive budget cuts for the rest of us. The corporate media doesn’t explain to over-taxed working families how they are paying more while the rich sock it away.

The current economic crisis is a shock and awe process designed to undermine low-cost higher education, force labor concessions from working people and protect the wealthy. We need higher taxes on the corporations and the top 1%, combined with free public college education and tax breaks for working families. And, we must have a media that tells us the truth about inequality and wealth. A true economic stimulus increases spending from the bottom up not the top down.

Peter Phillips is a professor of Sociology at Sonoma State University, and former director of of Media Freedom Foundation/Project Censored. He wrote his dissertation on the Bohemian Club in 1994. Read other articles by Peter, or visit Peter's website.

5 comments on this article so far ...

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  1. greybeard616 said on November 24th, 2009 at 2:01pm #

    The overall goal is to reduce the lower classes to debt peonage, “that way it used to be” and “ought to be”! The United States has turned its back on democracy, and almost nobody has noticed–they herd like cattle, following the illusion that by virtue of not wearing chains they are in fact free. The only people more indentured to a lie are Israelis!

  2. rosemarie jackowski said on November 25th, 2009 at 11:34am #

    Time to expose the paper chase for what it is. All of my life I have placed a high value on learning/education. In recent years I have placed an even higher value on self’ education. Too much of the ed system from K thru grad school is a scam. If you needed brain surgery would you prefer to have it done by a doctor who had a successful history of that type surgery through an apprentice program, or would you prefer someone with a lot of diplomas on the wall?

    Everyone needs to check on the salary and compensation package for their college CEO. The ed system has the same problem as the medical/hospital system. Too much money going to the top and too little going to those who change the bad pans.

  3. Deadbeat said on November 25th, 2009 at 3:31pm #

    The ed system has the same problem as the medical/hospital system

    It’s called Capitalism

  4. Brian said on November 25th, 2009 at 5:29pm #

    Per usual, this line of argument—almost certainly correct, doesn’t really get much space in the mainstream media where those who care to know typically get their news.

  5. rosemarie jackowski said on November 26th, 2009 at 8:56am #

    Deadbeat…I agree.

    Brian…I agree. The newspapers and media are owned by capitalists. The politicians are owned by capitalists. The voters are under the mind control of capitalists. The schools are just part of the larger system that should be boycotted. Discrimination against those who do not have the right piece of paper/diploma is not only allowed – it is institutionalized. Imagine if that kind of wage and job prejudice was permitted based on race/religion etc.
    Time for all of those without papers to get organized. If we had a just judicial system, I would suggest law suits but the courts are also owned and controlled by capitalists. Seems like Catch 22 all around.