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Comment by metaphorm | Hacker News Reader

> So, pardon in advance for the vulgar language, but why the fuck is this OK? From any company?

shareholder capitalism. they have zero accountability except to their shareholders.

> shareholder capitalism. they have zero accountability except to their shareholders.

Random thought that just came to mind. Have coalition of debt holders (borrowers ) ever considered buying stock in these companies to influence them in the form of another company that is jointly owned or invested in by thousands or tens of thousands of folks?

Eg, mass activism campaign launches request for everyone to invest X% of what they normally would have paid into loans for the month (above the minimum thresholds of course), and/ or y% of disposable income into this fund. Now obviously one or ten people doing this will own just a few hundred stocks, but thousands doing this get tens of thousands of stocks-- thats when it could get interesting ;)

Obviously, would not be available to those really struggling under massive loan burdens and struggling to make every payment, BUT for those in the AND gate between reasonably high loan burden and comfortable income, which is a huge overlap with HN by the way, the impact could be massive.

In the end the results could be beautiful though: cannibalizing capitalism , - an inside job.

the combined assets of the entire class of student debtors is probably NEGATIVE (they are debtors, remember) whereas the assets of even a single major shareholder (Carl Icahn as a benchmark) are in the billions of dollars and outweigh the rest of it combined.

this is one of the side effects of the massive income and wealth inequality American style capitalism causes.

Present assests- probably, but when taken over a longer time scale this makes increasing sense. many folks with >100k debt usually have several grad degrees , medical, engineering, law, etc, & whether annualized or summed, their future earnings may be productively invested into an advocacy campaign which would not only benefit them but others who have less natural income cushion and thus less of a parachute.

Individual mega-investors are no doubt powerful, but what about investor collectives. if a single company and/or entity can take on even 1/10th the power of Icahn collectively, it is something worth considering.

there is asymmetry of purpose as well as asymmetry of net worth. an individual mega investor spends as much as he (or she, but lets be honest, its almost always he) wants on anything at all. a class of several tens of thousands of investors in a collective will struggle with their decision making in all the expected ways.

That's why people put pressure on the administrators of pension funds to invest or divest in accordance with political goals.

>>the combined assets of the entire class of student debtors is probably NEGATIVE

Doesn't matter. As the saying goes: if you owe the bank $1,000, you have a problem. If you owe the bank $100,000,000, the bank has a problem.

Debtors as a group probably would have a great deal of collective bargaining power.

If debtors could get organized and all stopped paying at once, it seems likely that Navient would run out of money before they got the spigot turned back on.

The consequence of course would be that student loans would cease being made, or be made much less frequently. This would have effects, some good, some bad.

US has never had problems with putting 1% of their population in jail. If every student, even the children of billionaires, massively refuse to pay back as a group, the banks would be too happy to strike a deal with the children of billionaires in order to put the 99% others in jail.

"US has never had problems with putting 1% of their population in jail." {Citation needed}

This is a pretty interesting idea. I have never heard of debtors banding together to negotiate lower debts before.

I'm not sure what you hope to get from it.

We need to be a little more clear: Carl Icahn's asset is the students' debts. That is what his wealth is made out of, in the way that soda is made out of corn syrup and water. No student debt would mean Carl Icahn would have to make an honest living, and he's not gonna go quietly.

people who can do this are benefitting from the way current things are setup. Why would they cut the branch they are sitting on.

Target market would not be folks already massively invested in these stocks. Target market would be student loan debtors who have comfortable jobs and salaries north of 50k.

Apps like Robinhood have opened the ability for folks earning even less than 50k , to comfortably invest.

Many tens of thousands may be interested; there could be a bigger market opportunity than you think.

How much is Robinhood taking in fees again?

Ever seen those articles talking about how in the last few decades increases in wealth have overwhelmingly gone to the top 1%? This is the outcome. The little people can't hope to compete.

Navient is a servicer. They make sure the money gets from the borrower's account into the lender's account on time. Their revenue consists entirely of the fees paid by the lenders for providing this service.

Make radical changes that impact the servicer negatively and the lender will switch to a new servicer to manage its payment flow.

The coalition of debt holders is now stuck with shares of some underperforming servicing company that just lost a huge contract.

They presumably have a charter to operate from a government that is supposedly by and of the people (all chuckling aside). That type of ideology is cancerous (it uses the resources of a host to replicate itself without regard to the host's well-being) to a social system.

This mythology needs to rest. There has been little shareholder capitalism action in recent history when one would think it would be at its highest.

Let's just look at the financial crisis from 2008, all the fraud, mismanagement, downright criminality with serious consequences for the companies involved has seen little to no shareholder activism. No executives or CEOs have been held accountable for their behavior or called to action by shareholders inspite of taking huge hits on their holdings.

The agency problem, 'short termism' and extravagant compensation and golden parachutes has also seen little action from shareholder activism.

Yet when it comes to anti-social behavior in regard to customers, employees and wider society 'shareholder interests' is rolled out on cue as some 'central plank of capitalism' when it barely works. It's become self serving and meaningless.

They're also accountable to the legal system.

just barely. to be held legally accountable an injured party has to file suit, litigate the case (long and expensive), and win a judgment that will be a large enough quantity of money to force the company to not just break the law in the same way again because it was profitable to do so.

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