I've mentioned the concept of “rent seeking” before. Here's a handy definition:
The expenditure of resources in order to bring about an uncompensated transfer of goods or services from another person or persons to one's self as the result of a “favorable” decision on some public policy. The term seems to have been coined (or at least popularized in contemporary political economy) by the economist Gordon Tullock. Examples of rent-seeking behavior would include all of the various ways by which individuals or groups lobby government for taxing, spending and regulatory policies that confer financial benefits or other special advantages upon them at the expense of the taxpayers or of consumers or of other groups or individuals with which the beneficiaries may be in economic competition.
via A Glossary of Political Economy Terms
Not to put too fine a point on it: rent seekers use government policy to divert money to themselves for providing services (or no services) for amounts that far exceed what it would cost to provide them more efficiently. It's not only bankers that do it, though they dominate the field. The term comes readily to mind when the subject of education privitization is under discussion. It doesn't take much imagination to figure out what will happen if we hand the system of public education over to private hands. We will soon find out that it is absolutely necessary that the CEOs of such company get six or seven figure salaries while, at the same time, we will be told that we can get high quality education while simultaneously paying our teachers close to nothing. If you don't have even a little imagination, maybe this will help you see our future:
Eric Parms enrolled at an Everest College campus in the suburbs of Atlanta in large part because recruiters promised he would have little trouble securing a job.
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But after completing a nine-month program in heating and air conditioning repair in the summer of 2011 – graduating with straight As and $17,000 in student debt – Parms began to doubt the veracity of the pitch. Career services set him up with a temporary contract position laying electrical wires. After less than two months, he and several other Everest graduates also working on the job were laid off and denied further help finding work, he says.Even that short-lived gig wasn't secured on the strength of Parms's degree. The college had paid his contractor $2,000 to hire him and keep him on for at least 30 days, part of an effort to boost its official job placement records, according to documents obtained by The Huffington Post. The college paid more than a dozen other companies to hire graduates into temporary jobs before cutting them loose, a HuffPost investigation has found.
Everest College's $2,000-per-head “subsidy” program in Decatur, Ga., stands among an array of tactics used for years by the institution's parent company, Corinthian Colleges Inc., to systematically pad its job placement rates, according to a review of contract documents and lawsuits and interviews with former employees.
More than a marketing tool to lure new students, solid job placement rates allow the company to satisfy the accrediting bodies that oversee its nearly 100 U.S. campuses, while enabling Corinthian to tap federal student aid coffers – a source of funding that has reached nearly $10 billion over the last decade, comprising more than 80 percent of the company's total revenue.
Check out the linked article, and take a look at the contract between the school and the employers. It's a masterful work of legal prose, dressed up with all kinds of protestations about the school's concerns for its students, yet devoid of any obligation on the part of the contractor to employ the student for more than 30 days.
Now, why doesn't the party that is always condemning “takers” take aim at welfare cheats like Corinthian? Inquiring minds want to know.
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