I woke up in a very good mood this morning and despite a plethora of scandalous news coming out of Washington I have somehow remained in it for at least these few more hours. Something happened last weekend that is contributing to my sunny attitude and I’d like to share it with you.
Robert F. Smith gave the commencement address at Morehouse College in Atlanta on Sunday. I must have heard of him over the years but I have to admit that as late as last Sunday morning the name meant nothing to me. That all changed Sunday afternoon!
The most recent reliable numbers I saw on student debt in America stood at $1.6 trillion. In 2016 I endorsed a House candidate in large part because he was one the first people I heard talk of the impending student debt crisis. Like the housing bubble of 2008 it is destined to explode unless we do something about it. Too many young people are graduating from college with a “mortgage payment” but without the house that should accompany it. They are deferring decisions like marriage, children, new cars, new houses and the accompanying purchases (i.e. appliances and lawnmowers) which is hurting the economy. (Keep in mind that the American economy is 70% consumer demand.)
The children who come from less wealthy households are the most severely impacted simply because they have to incur the most debt. By uttering the following sentences Mr. Smith did his part toward solving the problem. “On behalf of the eight generations of my family who have been in this country, we’re going to put a little fuel in your bus. This is my challenge to you, alumni. This is my class – 2019. And my family is making a grant to eliminate your student debt.”
Smith pledged to pay off the entire student debt of Morehouse’s 2019 graduating class. Estimates run as high as $40 million. With a 2016 reported net worth of $2.5 billion he can afford to back up his words. Smith made most of his money as a venture capitalist via his firm Vista Equity Partners. I believe in our hybrid economic system very much including the capitalist part of it. I also like to see those who have prospered give some back. This is not Smith’s first large philanthropic endeavor, but it is his most well publicized and hopefully most impactful.
Obviously Smith doesn’t believe in a free lunch and wants people who have been fortunate to remember where they came from. No sooner did the applause die down from his announcement than he challenged Morehead’s Class of 2019 to pay forward their good fortune to future graduating classes. The genius of Smith’s move was that he made paying forward an achievable goal by removing the shackles of student debt from the entire graduating class of a prestigious college. I’m not so naïve as to believe that these young men will immediately become wealthy. However having a debt free start is huge. How many poor financial decisions do people make because that is the only way they see of getting to the next day, week or month? Unencumbered by student debt they can make smarter decisions and have better long-term outcomes.
We don’t all have the financial means of a Robert F. Smith, but we all need to remember where we came from and pay back to society in the manner and amount we are able. It may be with money, it may be with time and it may be with something as simple as an act of kindness. Not everyone who has done well financially and/or benefited from the Trump Tower Tax Cut is a liar, fraud, tax cheat or all of the preceding. Many are moral men and women. Robert F. Smith certainly is in the latter category; he put me in a good mood and America in a better place.
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