Bernanke says student debt no threat to U.S. financial system | Reuters

According to Ben Bernanke, former head of the Fed, student loans are mostly backed by the government while mortgages, which sparked the 2008 financial crisis, were held by publicly traded financial institutions susceptible to panic.

Source: Bernanke says student debt no threat to U.S. financial system | Reuters

This article by Reuters highlights the skyhigh levels of student debt in the US, set against a poor outlook for jobs. Without wealthy parents, ambitious young people are forced to taken on student debt. This situation will no doubt color the views of many young Americans ahead of the US presidential election.

This article highlights the risks for young people in other countries, with high levels of student debt. In Europe for example, it is hard for young people to find proper jobs to utilize effectively their education. Typically, student debt levels in Europe do not yet reach American levels.

Part of the problem is to do with technology changing the outlook for jobs and educational establishments not matching educational services with demand for jobs.

Thoughts?

Capitalism in Crisis Amid Slow Growth and Growing Inequality – SPIEGEL ONLINE

English: A chart demonstrating increases in th...

English: A chart demonstrating increases in the annual income of the top 1% of wealthy persons in the U.S. before economic crises. (Photo credit: Wikipedia)

Lehman Brothers Rockefeller centre

Lehman Brothers Rockefeller centre (Photo credit: Wikipedia)

This series of articles by Spiegel is well worth a read. Check it out!

via Capitalism in Crisis Amid Slow Growth and Growing Inequality – SPIEGEL ONLINE.

Let me try to get to the heart of the matter. The wealthy and privileged have seen their incomes and wealth increase substantially since the financial crash of 2008. Unfortunately, middle and working class people have received a smaller and smaller slice of the cake. I agree with Spiegel that the the crux of the problem is the banks which are not working effectively.

Let me ask a few open questions:

  1. Following the financial crisis of 2008, how many dodgy bankers have ended up in jail?
  2. Also why have the big banks not been broken up to increase competition?
  3. Surely, it would have been prudent to reintroduce the Glass Stiegel Act in the US, separating retail and investment banking.

Thoughts?