American college graduates are suffering financially under the weight of $1.5 trillion of student loan debt. The bulk of that debt stems from worrisome federal student loan practices and ballooning state tuition costs. Approximately 75 percent of college students attend a state university or college with tuition rates set by legislatures or state institutions. Over 85 percent of student loans are generated under the federal student loan program. In the past three decades, tuition at state colleges has increased by 313 percent.
Oddly, some seem to blame “capitalism” for the student loan predicament. Ray Dalio, billionaire investor, cited massive student debt loads in a recent article that made the case for reforming capitalism. Presidential Candidate John Hickenlooper penned an op-ed for the Wall Street Journal boldly proclaiming he is running for president to save capitalism. The very first point in his argument is that (public) high school education doesn’t provide adequate training for the modern economy. Anecdotally, we have heard the federal student loan predicament conflated with capitalism.
The Hardship Is Real
The pain of student debt is real. Sadly, there are many adults burdened by thousands of dollars in loan debt. Khalilah Beecham-Watkins, a first-generation college student and young mom, is one of many who feels as if they’re a prisoner to student loan debt. Khalilah has been working to pay down her $80,000 debt while helping her husband tackle his own loan obligations. In an interview last year, she said, “I feel like I’m drowning.”
As is well-reported, many young adults feel like Khalilah. In the United States, the average student loan debt is more than $37,000. As unsettling as that figure is, some graduates face even higher debt loads. About five percent of degree earners have student loan debt totaling $100,000 or more. Stories like Khalilah’s need to be told so that students don’t flippantly take on crushing debt without recognizing the gravity of such a decision.
This significant debt load is exacerbated by the fact that many graduates are finding it difficult to find well-paying jobs, which has spiraled into incredibly high rates of loan delinquency: More than one out of every 10 loan recipients is unable to keep up with payments. The Brookings Institute estimates that nearly 40 percent of borrowers will default by 2023. These are sobering statistics, and it’s important that borrowers be fully aware of the risks and benefits associated with debt of all kinds, including student loans.
The Benefits of Investing in a College Degree
Despite the burden that comes with debt, there are undeniable long-term benefits to earning a degree. In our skills-based economy, it is no surprise that a person with a bachelor’s degree will earn significantly more than a person with only a high school diploma. It has been estimated that a bachelor’s degree increases a person’s average lifetime earnings by $2.8 million.
And the more degrees someone holds, the more their earning potential increases. Studies indicate that earning a graduate degree could triple a person’s expected income. But in the near-term, the financial stress of loan delinquency, deferred consumption, and lower net worth is real.
While the buck ultimately stops with each of us when it comes to our own financial decisions, the student loan quagmire is chiefly the product of federal policy. Federal laws prohibiting sound commercial lending practices and states setting tuition rates high enough to guarantee they’re able to absorb all the federal money they can are complicit in this widespread problem.
Bad Diagnoses Lead to Bad Prescriptions
Rather than addressing the underlying problems of federal financial aid and rising public college tuition, politicians like Senators Elizabeth Warren or Bernie Sanders are offering politically expedient ideas. Sen. Warren proposes debt cancellation of up to $50,000 to more than 42 million people.
Sen. Warren’s plan would eliminate debt for 75% of borrowers with student loans, and federal funding to ensure students attend state college for free. But nothing in life is free. Warren’s sleight-of-hand doesn’t make existing debt or future tuition magically disappear. Rather those costs are passed on to taxpayers. And since college graduates earn roughly twice as much as high school graduates and can expect to be in higher tax brackets, guess who would be paying the taxes for Sen. Warren’s plan.
Why Federal Loans Are Not Like Commercial Loans
To understand the federal student loan mess, it is necessary to understand some details about the loans that are at the center of the issue. The federal government provides a few types of loans, but the largest share of student debt comes from subsidized and unsubsidized federal loans.
In the case of a subsidized loan, the Department of Education pays the interest on the loan while the student is in school and for six months thereafter. A student can qualify for this type of loan whether or not they are creditworthy or have the ability to repay the loan.
In typical commercial lending, a bank would not offer a loan to an individual who didn’t hold a reasonable promise of being able and willing to repay it. This harkens back to 2008 when the US housing market collapsed because of irresponsible lending practices and the belief that everyone—no matter their financial situation—should own a home. It should be no surprise, then, that some economists predict a similar implosion of the student loan market. In other contexts, this would be called predatory lending.
The State’s Role in Tuition Inflation
The second contributor to these financial aid troubles is ballooning state college tuition rates. State legislatures and state institutions set public college rates, so these state officials should be held accountable to provide lower-cost alternatives. One lower-cost alternative to traditional on-campus programs would be to offer a basic skills-based college curriculum online at-cost, i.e., based on the marginal cost of providing downloadable lecture videos and similar programming.
While the total cost to a student of an online degree currently tends to be less than a traditional degree, the tuition is often the same. By offering video of select classes, schools could unlock the value of their existing educational resources and expand access to more students. However, state schools are largely immune from market discipline, which encourages cost-cutting and leveraging economies of scale. Instead of reducing operating costs and tuition prices, state schools soak up the flow of federal loan dollars.
On the finance side, state universities could offer their own alternative to federal student loans. Take, for instance, the market-oriented model of Purdue University and offer income sharing agreements (ISAs). Income sharing agreements allow consumers to pay off a debt by sharing a portion of the student’s income with the lender for a set number of years. Instead of a loan, ISAs allow investors to take “equity” in a student’s future earnings for a period of time.
The problem with the financial aid predicament is that market discipline has been eliminated from state college education and federal financial aid. Public colleges aren’t going to be privatized and run like for-profit businesses any time soon. However, by applying market-based innovations and lessons from the private sector to state colleges, it may be possible to expand access to state college, offer alternative financing arrangements (like income sharing agreements), and reduce the cost of college through technology and economies of scale.
Doug McCullough is Director of Lone Star Policy Institute. Brooke Medina is communications director at Civitas Institute in NC. Their opinions are their own. This article originally appeared on fee.org. Reptrinted in full, with permission.
I have a question for those screamers who claim to be students of the Chicago School of Economics. Or have a gig at one of the business television networks.
What part of the Bill of Rights says “Congress shall make no law or allow no tariff abridging the right of citizens to gather at Walmart and buy cheap Chinese crap”?
To listen to most of the folks on CNBC, Fox Business and Bloomberg, you’d think they replaced the Second Amendment with that.
I’ve been in business, negotiating deals, for most of my adult life. A bad deal is when you memorialize being taken advantage of. A good deal is when all parties to the deal get something they want.
Our trade deal— from the beginning of modern time to date—with China can generously be called a bad deal.
Apparently we want the cheapest flat screen television sets so badly we’re willing to give up our rights to sell stuff in China to get them. And if President Trump thinks that’s a bad deal and wants to impose tariffs to correct it, the companies importing and selling those sets scream that the American consumer is going to take a beating. As opposed to the American worker, who of course, are one and the same.
Then, when it all is sorted out by the Wall Street Journal, that beating appears to be about $800 a year per family. And, keep in mind that the Journal is also populated by many of the same screamers on TV.
The big weekend story was that Apple could be hurt because most of its products are assembled in China.
As an iPhone user (in fact, I use just about every Apple product except the Mac) my humble suggestion to Apple CEO Tim Cook would be build your products in, say, Viet Nam or, here’s a real idea: how about Minnesota, down the street from where Mike Lindell makes My Pillows? No matter how much you say the words multi-national, living in Cupertino has to be nicer and more efficient than Beijing.
At some point you have to realize that the word “nationalism” is not a four letter word.
Steve Jobs and Bill Gates started their companies because you can do that in the United States. They expanded to markets like China in a search for new markets.
And, let me tell you a little about our “friends” in China. They owe me and millions of other Americans millions of dollars in defaulted bonds which their government doesn’t want to pay. Those bonds were issued before China became Red China and many of us either bought them or inherited them. (You can read about that at the American Bondholders Foundationhttp://www.americanbondholdersfoundation.com) They were sold by Wall Street firms who today are still selling Chinese debt.
So, I’m not very sympathetic to the words “trade war” because I doubt that the Chinese have the economic muscle to cause us much pain—not nearly as much as the folks on business TV would like us to believe.
Simply put, President Trump is right and these guys are wrong. After all, God, it is said, invented Economists to make Astrologers look good.
And if it costs us $800 a year per family—or even significantly more—to make that point to the leaders of Red China, buy less cheap Chinese crap and more stuff made in America. It will strengthen our hand and, in the long term, make our lives better.
Trump advisor Larry Kudlow explained the issues very succinctly to Chris Wallace on Fox News Sunday. “Intellectual property theft has to be fixed. Forced technology transfer and ownership of American companies has to be fixed. Cyber interventions have to be fixed. Tariff and nontariff barriers have to be fixed. And there have to be very, very strong enforcement provisions.”
To say that none of this is worth taking strong steps like tariffs is exactly like the Democrat House saying that there’s no crisis on the border.
This President fixes things. The Chinese aren’t used to dealing with a President who fixes things.
They will learn soon enough.
In the meantime, while they are dancing, pay attention to Kudlow’s observation about that, “Some of the Chinese officials have said the agreement was too unbalanced. No. The relationship has been too unbalanced and because of these problems of unfair and sometimes unlawful trading practice, we have to have a very strong agreement to correct, to right, these wrongs before we would be satisfied.”
“The problem isn’t just that Donald Trump is a narcissistic liar, the problem is that his followers don’t care!” -Unknown
If there is one thing that I have seen in my life, and that on a continuous cycle, it is the American people that are caught up into the circus of politics. Americans just cannot figure out the game that is being played. They do the same things over and over in following politicians that promise them everything and deliver nothing. In fact, they often provide the opposite of what they promised (John 8:44).
That we henceforth be no more children, tossed to and fro, and carried about with every wind of doctrine, by the sleight of men, and cunning craftiness, whereby they lie in wait to deceive. -Ephesians 4:14
This is done by the men and the women that have transformed themselves into angels of light (2 Corinthians 11:14).
Instead of Americans doing their own due diligence by studying the Bible (2 Timothy 2:15) and the US Constitution, they just turn on the television to be lied to on a 24-7 basis. All this is in the face of the 94% of Americans that say they do not believe the media, but keep falling to the same deceivers over and over again. Then they wonder why they are reaping the curse (Jeremiah 17:5; Daniel 9:7).
Speaking of one of many such deceivers is Donald Trump! I have shouted from the rooftops time and time again that what this man says, and what he does, are just the opposite (John 8:44).
For example the American people are told that the economy couldn’t be better and that Trump will eliminate the national debt in 8 years, only to find that instead, his budgets would add 1.9 trillion during this time increasing the U.S. debt to 29 trillion dollars.
On April 26, 2017, We were told that Donald Trump pulled the feds out of K-12 education, as if to suggest that a campaign promise has been fulfilled.
However, the fact is that on September 10, 2018, Donald Trump and his U.S. Education Secretary pick Betsy DeVos signed on to a radical global “declaration” that calls for, among other absurdities, brainwashing children to believe in the United Nations-backed ideology of total government known as “ ‘sustainable development.” In fact, the pseudo-treaty inked by Trump’s education chief suggests that the purpose of schooling is to indoctrinate children with the right “values” and teach them to be obedient worker drones.
Donald Trump sells himself on the campaign trail as the pro-lifer to the American people only to find out that, once again, just the exact opposite is true.
(CNSNews.com) reported February 9, 2018 – Despite promising to defund Planned Parenthood, President Donald Trump signed a budget Friday, which was passed by the Republican-led Congress, that fully funds the nation’s largest abortion provider.
In a letter to pro-lifers during the election, Trump and Vice President Mike Pence said “I am committed to … Defunding Planned Parenthood as long as they continue to perform abortions, and reallocating their funding to community health centers that provide comprehensive health care for women.
While the budget provides more funding for community health centers, it also fully funds Planned Parenthood.
In fact, Trump has signed multiple continuing resolutions (CRs) that fully funded Planned Parenthood despite his campaign promise to defund it.
The bill was passed in the wee hours of the night (Same thing with the Patriot Act after September 11th, 2001) and complaining they had just seven hours to read the 2,232-page bill, the “length of two Bibles,” according to Rep. Rod Blum (R-IA), a bill, said Senator Rand Paul, “which almost no one read.”
The president plays up to the public that he is in full support of the Second Amendment, and then blatantly attacks it by suggesting after the Parkland shooting that government should first take the guns first and then provide due process. The president goes on to show his hand by banning bump stocks, as well as nominating gun confiscating advocate William Barr for Attorney General of the United States. In Trump’s first 500 days of incumbency, 55 illegal and unconstitutional legislative acts have stripped Americans of the right to bear arms under 26 governors in which most were Republicans.
I have also highlighted in the past the treasonous acts of this administration concerning that of removing NAFTA and replacing it with something far worse. I wrote that the American people have been diverted in keeping their eyes on the southern border concerning illegal immigrants coming into America, but they fail to hold accountable America’s said representatives who are illegally alluring them into your country in the first place. Point man Donald Trump and rivals Nancy Pelosi and Chuck Schumer have you heated up over a wall that was promised, which has yet to be built.
On November 30, 2018, President Trump, along with the Prime Minister of Canada and the President of Mexico, signed the United States-Mexico-Canada (USMCA) “Trade Agreement”. “Trade” is in quotes, because the document isn’t about “trade” – it’s about setting up global government. “Agreement” is in quotes because the document is a “treaty” – and that invokes the two-thirds ratification requirement of Art. II, §2, cl. 2, US Constitution.
Kristin Stockheimer wrote at The New American:
Not only is it still alive, it is larger and much worse than NAFTA! The text of the USMCA, according to former U.S. Ambassador to Canada Bruce Heyman, has portions and chapters of the agreement that are identical to those in the Trans Pacific Partnership (TPP). Robert Lighthizer even admitted it is “built on” many TPP aspects. These facets, according to The New American writer Christian Gomez, have the potential to strip the U.S. of its sovereignty:
Much like the TPP Commission, the Free Trade Commission can make changes to the USMCA without the consent of Congress. In fact, the agreement completely undermines Congress’ Constitutional Article I, Section 8 power to regulate trade with foreign nations.
William Gheen reported Top 10 List of Trump's Broken Campaign Promises.
And for pulling the mask off this current administration, as well as the past administrations, the ignorant shoot the messenger by accusing, “You must be for the Democrats" (Hosea 4:6)! I respond with, "Unprincipled fools." What is happening today is not under a Democrat, is it? And Barack Hussein Obama, the foreign sodomite, is not the president any longer, is he?
Let me play the fool's game that so many today are caught up into and set the record straight, today’s Republicans are yesterday’s Democrats.
There is no such thing as a Democratic Party no more than there is a Republican Party (There are 101 party un-Constitutional affiliations). The party system runs antithetical to the US Constitution. In other words, a political language which is foreign to our Constitution.
I will stand with representative government when they do the right, and I will stand against them when they do the wrong, period! It is being a principled people. Principles, not favorites. I am for the law (Article 4 section 4 US Constitution).
How many times did Jesus warn not to be deceived about many coming in His name (Matthew 24:5; Mark 13:6; Luke 21:8)? How many times did Jesus teach that we are to judge men by their fruit (Matthew 7:15-20)?
And for all of this, the American people are still trying to figure out what is happening to them and their country.
Americans, this is what is promised to a nation that refuses to keep the commandments of the Most High God (Leviticus 26:15-46; Deuteronomy 28:63). Simply put in a way that no man can refute.
Watching President Trump host a national day of prayer at the White House—immediately after Nancy Pelosi spewed impeachment talk at her press conference—reminds me of a favorite story about my late friend, Oral Roberts.
President Roberts was, of course, the biggest fan of the Oral Roberts University basketball team, for which my then Tulsa radio station, KTRT, created a network to distribute the broadcasts which we originated. But ORU was an independent at the time and had to hire referees from the Big Ten, Missouri Valley and other conferences. Sometimes, they didn’t get the best refs.
One of the features at an ORU home game was an invocation, usually given by a student in the divinity school. As students are wont to do, the invocations began getting longer and longer until they began to irritate President Roberts. The kids were spending time blessing everything in the building…the hardwood, the rims, the band etc.
One night, prior to a fairly big game, President Roberts caught me in the hallway of the Mabee Center and asked if we cut away during the invocation and the National Anthem. The answer was an emphatic no, we did not because I always found that carrying a message to God and to our nation is also good business and was unashamed then and now. (That is our policy even today.)
He smiled and said, “good, tonight will be interesting.”
At the appointed time, public address announcer Doc Blevins waited for the lights to go down and said something like, ladies and gentlemen, giving tonight’s invocation is the founder, President and Chancellor of Oral Roberts University…Oral Roberts!
The spotlight went on, President Roberts strode to the center of the court, put a microphone to his mouth and said, “Heavenly Father, please bless the referees’ eyesight. Amen” And walked off the court.
Then, he came over to our table, sat down next to me, smiled and asked, “How did I do?”
He later told me that he never prayed for a win. That God doesn’t determine wins and losses. He just gives you the talent to win. Winning is up to you.
But things which stood in the way of winning—poor officiating, as an example—were fair game.
To a great extent, that’s where President Trump finds himself today.
He is a very talented individual who won the Presidency against all odds. God gave him that talent. Think of the Democrat controlled House as a mediocre referee who has a decided vendetta against a very non-establishment, independent public official.
The House is trying to use every opportunity to make a call against the President.
As usual, when officiating gets in the way of the game, there are no immediate winners and almost everybody involved loses.
Frankly, the House Democrats are just like the refs who screwed the Vegas Golden Knights in the last game of round one of the Stanley Cup Playoffs. And the results are most likely the same in the long term because it is the fans (the voters in this analogy) that get to make the ultimate decision. In sports, the decision shows up in attendance and TV ratings over the long term. Think Colin Kaepernick and the NFL.
Do you really think that the Democrats, running on investigating the President, will be successful?
So far, they are not only out of control on investigations but on the positions being staked out by the 20-some candidates who think they have what it takes to become President.
You can’t beat a horse without an equally talented horse—unless some state employee gets involved (think last week’s Kentucky Derby) and we’ve already been through that in the past two years.
I guess it all gets down to Oral Roberts’ position that you never pray for a win.
That’s what the Democrats are doing because the only reason any of them can give to get elected is that they are not Donald Trump. Americans are not that stupid.
American Progressives today like to talk about their Green New Deal, free higher education for all and slavery reparations. But recently the eminent economist Dr. Thomas Cargill addressed Reno’s Hayek Group about Progressives’ original cause: eugenics.
Eugenics is a dark and troubling part of US history – one not accurately reflected in standard accounts and teaching today of that history. The “scientific” racism of eugenics ideology flowered in the second half of the 19th Century through the 1930s.
It classified persons as “fit” or “unfit” based on traits assumed to be hereditary, including race and ethnicity, mental and physical characteristics, and country of origin. Because “fitness” was assumed to be genetic, it was hereditary and thus immutable: not subject to alteration via environment, nurture or other conditioning methods.
Eugenics gained wide acceptance, even being reflected in decisions of the Supreme Court of The United States. “Three generations of imbeciles are enough,” said Chief Justice Oliver Wendell Holmes in the case of Buck v. Bell, a 1927 decision upholding a Virginia law that authorized the state to surgically sterilize certain “mental defectives” without their consent.
Eugenics doctrine had a broad reach from justifying slavery to the alleged superiority of Nordic peoples (“Aryans”) to other races. It was fostered in the US by the mushrooming of the administrative state during the progressive period, and it also provided some ostensible intellectual foundation for that mushrooming.
German Nazism also drew greatly on the developing American eugenics tradition. As much as anything, the fall of the Third Reich undid eugenics.
After the Civil War, it was used first to justify low military compensation for blacks and then to support barriers to non-Nordic immigration. Implementation of eugenics was helped by the rise of progressivism’s administrative and interventionist government over-riding the outcomes of free markets. By 1905, 32 states had sterilization laws fostered by eugenics, and thousands of people were sterilized.
One scholar recently noted, “Eugenics and progressivism were made for each other.” The doctrine was an excuse for the exercise of extreme coercive collectivism, the fundamental means employed by progressivism.
Minimum wage legislation was also originally related to eugenics, as it proposed to let the market pay low or no wages to the unfit persons (mainly races) so they would over time die off. Even the famous Yale economist Irving Fischer bought into such dogma.
Perhaps the most (in)famous proponent and activist in favor of eugenics and its abuses of human beings was Planned Parenthood founder Margaret Sanger, who was an outright racist. Her 1933 article in the journal Birth Control Review was also a strong argument against immigration to America. And sterilization of the mentally ill was a popular birth control idea from the start.
The notable surprise beyond the flourishing of eugenics in America is that it has been almost completely omitted from modern history and government texts. Since almost all high school students must take a US history course, this omission has given them a completely false account of very important US history, politics and government. Eugenics and its disastrous history as a key part of progressivism are at best mentioned in passing, and mostly minimized and treated as not a significant part of our history.
Why? The writers of the books don’t themselves seem to know much about this central subject. Some authors are aware, but seem to consider it unimportant; eugenics is viewed by many progressives as the crazy uncle in the family. Also, eugenics’ relationship to abortion makes it a taboo subject for many advocates of that practice. And almost all these writers are progressives with a bias in support of the over-reaching administrative state, and discussing eugenics undermines that key advocacy.
What do students lose due to these biases and omissions? First, balanced and reasonably complete perspective on US history, politics and government and the roles of various factions then and now. Second, a necessary skepticism of the ideology of catastrophe supported allegedly by science. (See also climate change deniers.) Third, the perils of small groups, especially of self-selected elitists, controlling social power; this often leads to bad decisions and social disasters. (See also China’s one-child policy.) Finally, a profound understanding of the power of even a bad idea.
It’s the kickoff for hurricane season and forecasters are predicting as many as 14 named storms with anywhere from 3 to 6 of these storms growing into major hurricanes. Here on the Gulf Coast, we certainly perk up when this time of year rolls around. For years, a good story in south Louisiana went like this:
“I’m a Catholic, so I certainly know a good bit about suffering,” she would say.
“Yeah, I’m a Louisiana homeowner, he answered.
“Oh, so you understand.”
Louisiana homeowners know a good bit about suffering, particularly when it comes to being stuck with the highest property insurance rates in the nation. The Clark Research Group determined that Louisiana has some of the highest insurance costs, coming in at an average of more than $6000.00. No other state in the South comes close. If you live in industrialized New Jersey, the cost is $1,318.00, a drop of some $300.00 in the past 10 years. California, with wildfires and massive rain caused mudslides, pays an average of $1,988.00.
But that’s not the whole story. Congress merely put its finger in the flood insurance dike with legislation that supposedly capped the skyrocketing rates of property owners in flood prone areas. But what our minions in Washington didn’t tell us is that the rates will continue to climb dramatically in the years to come. The legislation is just a quick fix to hoodwink voters in order to get through the next election cycle.
Because of the devastating hurricanes that seem to hit the gulf coast at least once a decade, the federal government has bailed out these southern states, literally and financially, time, and time again. Some cynical members of Congress have even suggested that it’s time for many homeowners to relocate. But attitudes are beginning to change, because other oxen are being gored. Mother Nature has given the Gulf South a pass in recent years, but she is causing havoc in other parts of the nation.
Oklahoma has suffered an unprecedented surge in both earthquakes and tornadoes and are clamoring for federal help. New York and New Jersey have a long way to go to recover from last year’s Hurricane Sandy. In Texas, hurricanes and wildfires have cost some $28 billion in recent years. California witnessed rapid growth in both drought and wildfires, and earthquakes remain a constant threat. A Wall Street Journal study published recently concluded that almost every state in the nation is subject to some major disaster.
So has a national plan that doesn’t use taxpayer dollars been proposed which is both comprehensive and affordable? Yes. Such a proposal was unveiled in New Orleans in May of 1995 at a catastrophe insurance conference sponsored by the American Insurance Services Group. I attended as Louisiana’s Insurance Commissioner. The proposal called for a Natural Disaster Insurance Corporation (NDIC) that would sell disaster reinsurance for residential and commercial properties while also providing primary coverage for residential properties. We all agreed back then that there would be a huge problem with catastrophic insurance losses all over America unless a national disaster program was put in place. And that’s just what’s happening across the country now.
Here is how it would work. Private insurance would take a small portion of its premiums and contribute to a state created fund. The state fund would then be backed up by a nationally created fund. The national fund could borrow to pay for any shortfall, but no federal tax dollars would be involved. Each state could buy in and have a rate set according to the risk. Hurricane prone states like Louisiana would pay more than a state like North Dakota that experiences much less in natural disaster damage. That was the plan then. And the good news is that in reaction to the devastation of Hurricane Sandy and the tornados in Oklahoma and Missouri, a number of states are coalescing around this same plan now.
It’s taken almost 24 years, but it looks like it could be the right time for problem solving. It’s just not a handout for the coastal states. The whole country will benefit. And at a price that’s affordable. We certainly cannot be any worse off than we are now.
“Bueller? Bueller? Bueller?” - Ferris Bueller’s Day Off.
“Mueller? Mueller? Mueller?” Just when I thought Robert Mueller had earned his day off. Anyway, a few weeks ago when his report was released, I almost thought we wouldn’t hear from Mueller again. But now Congress wants unredacted report and wants Mueller to testify because Mueller sent a letter claiming that Barr misrepresented his report. President Trump said, “It should be up to the AG if Mueller testifies,” but then AG Barr said to Congress, “I don’t care if Mueller testifies, ” but then Barr didn’t show up for his second day of testimony, and now Congress wants to hold AG Barr in contempt. But then, the President changed his mind saying Mueller shouldn’t testify. So, now, of course, Mueller will testify before Congress. But then … President Trump invoked Executive Privilege to prevent Congress from seeing the unredacted Mueller report, which will probably delay Mueller's testifying.
How naïve of me to assume this was over and done.
Anyway, I tried to read the entire Mueller report. But I’m only one guy, and it clocks in at 450 pages, and I have other work to get done. I got through about a third of it and mostly skimmed the rest, stopping to fully read a page or two that seemed important or to focus on some of the redacted bits to see if I could figure out what it was redacted (usually - no). Now, I know that “skimming” is not an exact science, but I suspect I’ve read much more of the full report than the vast majority of folks. And so, I tackle the following issues with a reasonable amount of knowledge.
A couple things I noticed. It’s very clear that Mueller found large amounts of evidence outlining Russian interference in the 2016 Presidential Election. Like, a jaw dropping amount of evidence! The other thing I noticed is that there is also, a jaw dropping amount of evidence - linking Trump staffers, advisors and family members to meetings and information swaps with the Russians.
BUT, as clearly stated in the opening statement summarizing the report, Mueller says, “... the investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.” And the reason Mueller states this is because there was no long term agreement between the Russians and the Trump campaign. That’s it. There was no “long term” agreement. Not, “The Russians and the Trump campaign never met up.” Because the report says they did. Only that there was no, “long term agreement,” to fit the legal definition of collusion.
Did the Russians sabotage the election in favor of Trump? The report says “yes.” Did the Trump Campaign meet with the Russians to get said stolen information? The report says “yes.” It’s just that there was no “long term coordination,” for it to be legally considered collusion. The Russians, realizing that a Trump White House would be much more sympathetic to their cause, committed cyber terrorism against the US, then stole a bunch of documents from the DNC, then gave the stolen information to the Trump Campaign in hopes to help Trump win, and then went on to commit huge amounts of additional interference from outright misinformation campaigns on social media to fraud. The Mueller report literally says there is huge amounts of evidence supporting all those claims, it’s just that there was no long term agreement between the two parties for it to legally constitute collusion.
Wow. That, um - forgive me for saying this but … that does NOT sound like “total exoneration.”
The next thing I noticed is that - not much of the report is redacted. The redacted parts come sometimes in giant black chunks, and sometimes in lots of little snippets. All in all, I would say, of the 450 pages there are about 20 total redacted pages. And certainly not in a row, they are scattered all over. Of course, our two political parties see those 20 pages in a completely different light.
Republicans, “We see the majority of the report and we understand the spirit of what is being said, and so no one has to read the redacted twenty pages - because it won’t change anything. Also, the report clearly says “No collusion. Total exoneration,” so any additional investigation is a waste of time.”
Democrats, “We see the majority of the report and we understand the spirit of what is being said but too much information can be hidden behind twenty redacted pages that might shed more light into an investigation that clearly states Russia sabotaged the 16’ Presidential Election. Also, the report does not say, “total exoneration,” in fact it says the opposite of “no exoneration,” so we would like more information.”
Hrmmmm. Well, they can’t both be right! You know? One side is clearly in the wrong here. Alas, we all know the day and age we live in. Our side is always right. No common ground attempted. The other side is always wrong. Ad nauseam.
Republicans like to think they are one hundred percent altruistic, perfectly just and always correct, while simultaneously believing that Democrats are devil worshiping, lying, “libtards,” who are one hundred percent wrong, one hundred percent of the time.
Democrats like to think they are one hundred percent altruistic, perfectly just and always correct, while simultaneously believing that Republicans are faux-Christian, lying, “deplorables,” who are one hundred percent wrong, one hundred percent of the time.
Common sense and reason appears to have gone the way of the dodo.
Well, allow me to apply some common sense and reason to this new Mueller … happening. Let Congress read the unredacted report and allow Mueller to testify, because there is no reasonable explanation for blocking Congress from the full report. Members of Congress have security clearance on all matters of national security up to and including investigations that look into - if a hostile foreign power sabotaged a Presidential Election - which the report universally found Russia to have done! That sounds like National Security to me. Which Congress has clearance for. Therefor, common sense and reason suggest Congress should receive the full report.
And now Trump is invoking Executive Privilege to prevent Congress from receiving the full report. Which, if you are not exactly familiar with Executive Privilege, from Wikipedia:
“Executive privilege is the power of the President of the United States and other members of the executive branch of the United States Government to resist certain subpoenas and other interventions by the legislative and judicial branches of government in pursuit of information or personnel relating to the executive.”
Fair enough. That is the right of the President (and members of the executive branch) and it’s an important protection. In fact, many modern day Presidents have invoked Executive Privilege, some have done it much more than once, including - Nixon (a few times), Reagan, Bush, Clinton (several times), Bush Jr. (several times), Obama and now Trump.
Of course, it should also be noted that Congress can breach EP but must sue in federal court. It’s happened before, and in two notable cases, Nixon and Clinton, the President lost. Nixon invoked EP to avoid Watergate, Clinton invoked EP to avoid the Lewinsky scandal. Congress sued and won in court. The rest, as they say - is history.
So, this is really nothing new. The cover ups. The investigation. The lying. The testifying. The “I don’t recalls.” The invoking of Executive Privilege. The lawsuit. So people should really stop their fake outrage because we’ve seen this happen over and over.
These new shenanigans are nothing new but will add to the cost of the investigation and the amount of time we have to hear about it. Apparently, the overall cost of the Mueller investigation, so far, is a bit more than $16 million. Maybe that sounds like a lot to you, maybe it doesn’t. For context, the 9/11 Commission was funded with a $15 million budget. I’m sure you folks remember the 9/11 Commission. If not, it was an investigation into how and why the largest terrorist attack on the US occurred, and what can be done to prevent future attacks. Which, is the exact definition of “a matter of National Security.” (I just scanned over the 9/11 report and did not notice a single redacted item, which, I know, is NOT exactly the same thing we have going on today with Mueller report, but was still something I thought was interesting).
Now we have a new report, that is literally looking into a matter of National Security, investigating if a hostile foreign power sabotaged the 16’ Presidential Election. One would think, when applying common sense and reason to this dilemma - the Mueller Report is an important investigation into the National Security of the country.
And if you feel annoyed that the Mueller report cost more than the 9/11 Commission, allow me to remind you that the Clinton Impeachment cost taxpayers more than both investigations combined. To break it down:
Clinton Impeachment - “Did the President lie to Congress while under oath, about weather or not he cheated on his wife?” Cost to taxpayers: $70 million dollars (adjusted for inflation that’s $105 million today).
9/11 Commission: “An investigation into the largest terrorist attack on US soil and, as a matter of National Security, a report on how we can be better equipped to thwart future terrorist attacks.” Cost to taxpayers: $15 million dollars (adjusted for inflation that’s $22.5 million, today)
Mueller Report: “As a matter of National Security, an investigation into if a hostile foreign power sabotaged the 16’ Presidential Election?” Cost to taxpayers: $16 million dollars (but could go up).
If you honestly can’t see which of the above is not like the others, well - then you can’t. But common sense and reason should tell you that two of them are matters of National Security, and one of them is total BS that wasted a lot of taxpayer money.
Republicans used to be the security party, the military party. Even President Obama had a Republican Secretary of Defense. Speaking of Obama, we all know the truth of this next statement, if a two year Special Prosecutor investigation uncovered Russian interference in 2012’s Obama vs. Romney election that involved stolen information from the RNC in a way that handed Obama the win - Republican heads would have exploded from rage induced aneurysms!
I bet then, with that ridiculous Russian/Obama scenario, Republicans would have been very interested in security and in preserving election integrity.
Now … meh, not so much.
Recently, the outstanding economist Richard Vedder penned a column in the Wall Street Journal on the problems of higher education in America. He titled it: “College Wouldn’t Cost So Much If Students and Faculty Worked Harder.”
The piece was a preview of his book on the subject, Restoring the Promise: American Higher Education Today to be published May 1. From his summary and from reading his previous writings on the subject, I’m certain the book will be outstanding
His analyses have coincided with my own as a Nevada legislator, higher education regent, college teacher and state controller, and he has brought good data to illustrate issues I have observed in those roles. So, here, I’ll present a summary of his WSJ piece, and in future column I’ll detail from my experience and his book some major issues and solutions to the serious challenges U.S. higher education faces.
Vedder begins: “One reason college is so costly and so little real learning occurs is that college resources are vastly underused. Students don’t study much, professors teach little, few people read most of the obscure papers the professors write, and even the buildings are empty most of the time.”
As a regent and part-time community college instructor for four years, I observed all these phenomena and more first hand. They are some key reasons higher education costs have increased faster in real terms than the incomes of students and their families while those students are being ever more poorly prepared for life and the job market. And taxpayers are shorted.
His first observation is that surveys show college students today spend about 27 hours a week in class and studying, while taking classes only about 32 weeks a year. Or, fewer than 900 hours a year on academics – “less time than a typical eighth-grader and perhaps half the time their parent work to help finance college.”
He notes other researchers have found that in the middle of the 20th Century students spent 50 percent more time – around 40 hours weekly. Grade inflation has vitiated their incentives to work hard because the average grade received has risen from B-/C+ in 1960 to B/B+ now.
Vedder notes that on some campuses students study much more. And, “Engineering majors probably work much harder than communications or gender studies majors.” Ditto, law and medical students. As a sometimes engineering major at Illinois, recipient of a masters from Stanford in Engineering Economic Systems and later law student, I know all that’s not new.
But neither he nor I are suggesting that students responding to the changing incentives is the only problem. Vedder confesses: “I’m part of the problem: I’ve been teaching for 55 years, and I assign far less reading, demand less writing, and give higher grades than I did two generations ago.” Most other professors are less demanding and productive in teaching and useful research than he is, while mostly hard-sciences instructors put in similar teaching and productive research time.
When I taught 15 years ago, I told my community college students at the start of the semester I would teach them just as I would at any four-year college, including the same reading, writing, homework and testing. However, I felt guilty because I succumbed to the grade inflation trend. On the other hand, because a third of them needed remedial English, writing and math skills (having been shorted by their grade and high schools), I provided that service.
Another point he makes is that objective measures show the results of college education today are underwhelming. Similarly, I noted in my controller’s annual reports that American K-12 students’ achievement scores in international tests are in the middle ranks of those for advanced countries, while our per-student spending is among the highest.
A major point I learned as a regent is that much of higher education’s problem is the proliferation of administrative and other non-teaching staff relative to all instructors. Because colleges and universities work hard to cover up this phenomenon, I had trouble getting data on it, and I look forward to his book for more information here.
When we understand the full dimensions of the problem, we can begin crafting remedies. Stay tuned.
So, Sunday morning, I opened the electronic version of the only local newspaper I subscribe to and trust, the Las Vegas Review Journal, and I see, buried on page A8, a story headlined “Poll shows Democrats more trusted with health care”
Which was true…sort of. Because I’m pretty sure the story reported the numbers of the poll accurately.
The “poll” was an “Associated Press-NORC Center” poll which, you had to read seven paragraphs to the bottom of the story—by the Associated Press—to find out that “The poll of 1,108 adults was conducted April 11-14 using a sample drawn from NORC’s probability-based AmeriSpeak Panel. The margin of sampling error for all respondents is plus or minus 4.1 percentage points.” Let me be the first to ask the question: If that factoid had been in the headline or in the first paragraph, would anyone take this seriously? What if the story read like this:
“A poll of 1,108 adults paid for by the company selling this story to news outlets says that Democrats are more trusted to handle healthcare in the United States. The pollsters say that the 1108 adults can predict the sentiments of the 128,824,246 voters who cast a ballot in 2016 with a margin of error of 4.1 percent.”
Would anybody actually believe—especially after the 2016 election—that a sample of .0000086 percent of the voting electorate has a margin of error of 4.5 percent? But, in my favorite local newspaper, it is presented as fact. If this kind of polling were accurate, why did virtually every pollster predict Hillary by 7 points on the day of the 2016 election.
Polling used to be easier because, for most purposes, you could at least get a sample which was demographically sound. We could tell roughly where you lived by your telephone number and who you were. Today, with the advent of cell phones and cheap VOIP services, we cannot even tell with certainty what state you are in. Further, there is the built-in bias of many news organizations which sponsor such polls. If you believe that the AP is some kind of neutral news behemoth, guess again. Ditto for CBS, NBC, CNN, ABC and, yes, even Fox. They all come at stories from a predominately liberal viewpoint (with the occasional exception of Fox) so why would you believe that their polling selections would be much different?
Then, there’s the “if you see it in the media it must be true” school of thought. It’s today’s version of Hitler’s propaganda minister Joseph Goebbels’ Big Lie theory which, simply stated, says if you tell a lie big enough, many people will have to believe it. Inevitably, these “polls” are presented by the same people who populate organizations like the White House Correspondents Association and are soooo offended by the term Fake News and the President’s assertion that those who willfully present Fake News are the enemies of the people.
But the truth is not only is President Trump correct, but the average voter knows bullcrap when he or she sees it. Journalists have a tendency to see themselves as more knowledgeable and more important than average voting citizens. Many times, in conversation, journalists use terms like “them” and “those people” to describe and differentiate average voters. As if journalists, somehow, fall into a different category. Like Hillary and the word deplorable.
Want some proof? Watch those panels on FNC and CNN. Watch the Sunday morning shows.
It’s that sort of hubris which allows them to write headlines and lead paragraphs like the one I referred to above—even in my favorite local newspaper. (And I’m not kidding about that.) I’ve been in this business since I was 12. But I live about 2,600 miles from Washington and my neighbors remind me daily that I’m pretty average. I would hate for it to be any other way.
Intensified by the early fight for money and backers among Democratic presidential hopefuls, Medicare for All and similar single-payer insurance programs have been promoted with increased volume. While there are differences among the “I’ll give you more for less” sales pitches, they share the common central premise that such plans have far lower administrative costs than private insurance, so their version of reform will produce a massive infusion of available resources.
However, the “proof” offered for those administrative cost savings claims mainly consists of constant repetition, with candidates then quickly moving on to the free lunches they would supposedly enable. But given that claim’s central place in their proposals, we must question that premise and with it, the glib answers claimed for it.
How Should We Measure Administrative Efficiency?
For health care plans, the standard measure of efficiency is administrative costs as a percentage of total costs. And in those comparisons, Medicare appears substantially more efficient. But that does not mean there would be savings if people were moved from private insurance to Medicare for All.
The primary reason is that Medicare beneficiaries are far older and less healthy than the population. That makes health care costs far higher per Medicare beneficiary. In fact, before Obamacare, medical expenditures per Medicare beneficiary were routinely more than double those for the privately insured. However, nonmedical administrative costs are only slightly related to total medical expenditures. They are primarily related to the number of persons covered. This causes the standard measure to grossly exaggerate Medicare’s relative administrative efficiency.
Consider an example. Say both Medicare and private insurance beneficiaries had identical administrative costs of $500 each, but the Medicare patient received $5,000 in benefits, while the private patient received $2,500 in benefits. Medicare would show a 10 percent share of administrative costs, and private insurance would show a 20 percent share. In other words, despite the same administrative cost per beneficiary—that is, the same actual efficiency—the standard measure makes private insurance administrative costs look twice as expensive as Medicare.
Simply ask what would happen to administrative expenses if one private insurance beneficiary was moved into Medicare in the example above. Despite Medicare supposedly being half as costly in that regard, administrative costs would not change. No resources would be freed up. And given that the administrative cost per Medicare beneficiary is actually higher than for private insurance, the shift of someone into Medicare would increase administrative costs—leaving fewer resources, rather than more—available for medical care.
What Should Be Included in Medicare’s Administrative Costs?
The public-private comparison also typically compares the administrative costs of private insurance to those that show up in Medicare’s budget. But many of the administrative costs do not show up there. They appear in other agencies’ budgets. The costs of collecting taxes appear in the IRS budget. The costs of collecting premiums appear in Social Security’s budget. Many of the accounting, building, and marketing expenses appear in the Health and Human Services budget. Including those costs would roughly double Medicare’s reported administrative costs.
How Should We Count Taxes on Private Insurance?
Private insurance administrative costs are generally defined as premiums paid in minus claims paid out. However, that means everything except claims payments are counted as administrative costs whether or not they have anything to do with administration. For example, many states impose a premium tax (averaging about 2 percent) on health insurers, and those tax payments are incorrectly categorized as administrative costs. This also makes Medicare, which is exempt from such taxes, look relatively more efficient than it really is.
How Should We Count Disease Management and On-Call Consultation Services?
As with taxes, counting private insurance administrative costs as total premiums minus claims paid introduces other measurement distortions, as well. Insurance companies offer disease-management and on-call nurse consultation services. However, those services do not generate insurance claims. Consequently, those costs are also counted as administrative rather than medical.
How Should We Count Fraud and Fraud Prevention Efforts?
Waste, fraud, and efforts at their prevention also complicate administrative efficiency comparisons. Consider what happens if Medicare (estimates of whose excess spending exceed $50 billion yearly) spent less on prevention efforts. It would look more efficient because its administrative costs would be lower and because undetected excess spending would be counted as medical expenses, not waste. In contrast, insurance companies, whose bottom lines are at stake, are much more diligent about eliminating such excess spending. But those efforts, even though they can generate very large overall savings ($1 of fraud prevention has been estimated to reduce those costs by as much as $15), raise their measured administrative cost percentage, making them look less efficient.
How Should We Treat the “Excess Burden” Caused by Switching to Single Payer Systems?
In addition to all these biases exaggerating private insurance administrative costs and understating Medicare’s administrative costs, another large difference should be noted. When people pay more to get better private insurance coverage, they don’t treat it as a tax, but as part of their employee compensation. Under Medicare for All, however, higher payments into the system will not provide greater benefits. That means that Americans will rationally start treating those payments as taxes in exchange for nothing.
It will, therefore, act as a large income tax increase with correspondingly large economic distortions. Those distortions, created by the wedges taxes impose between what buyers pay and what sellers keep, reflect the wealth destroyed by the reduction in mutually beneficial market arrangements that result, which economists call excess burdens. While not incorporated in official comparisons, they are very large added costs of single-payer systems compared to private medical insurance.
One study found that even the “lowest plausible assumption about the excess burden engendered by the tax system raises the true costs of delivering Medicare benefits to about 20-25 percent of Medicare outlays,” imposing costs far higher than any supposed private insurance administrative cost deficiency.
It is striking how much single-payer promoters rush past their repetitions of administrative cost savings claims before quickly turning to their vote-buying promises in large part funded by them. It almost seems that they don’t want voters to think carefully about those claims. And that might reflect an accurate judgment. If people questioned the basis of those promised solutions, it would reveal supposed administrative cost savings to be the opposite once the compounded mismeasurements are deciphered, and it would not be anyone’s ticket into the White House.
Gary M. Galles is a professor of economics at Pepperdine University and a guest columnist to the Penny Press. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013). This piece was originally published on fee.orgm then pennypresslv, reprinted here in full, with permission.