Capitalism Claims Another Victim

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A few years ago I invented something called the Atlas Shrugged Scale. It’s a way of estimating how close reality comes to the satire in Ayn Rand’s Atlas Shrugged.

Some may recall the time when the novel’s portrayal of bureaucrats, social activists, government enforcers, and crony capitalists was denounced as impossibly far-fetched, as just downright pigheadedly mean. We don’t hear much talk like that anymore.

The reason is that every day brings us real-life stories that seem to be written by Ayn Rand, still satirizing from the Next World.

The moral that friends of the college take home with them is that the college was a victim of the capitalist system.

Here’s one. A college is started by a dissident professor who thinks it’s a good thing for faculty to be scared by their students. He puts his college in an economically depressed town where lots of people have time and government benefits on their hands. It apparently admits everyone who wants to enroll, and to have no required courses. There are no grades. Yet in 40 years it manages to enroll at most 200 people at a time. When the college wants to establish a “cultural exchange” with another institution, it chooses the University of Havana. Vaunted college accreditors vouch for the place.

The annual budget of this college is around $20,000 per student, a hefty sum for a place that barely exists. But its president, who seems to owe her appointment to the fact that she is married to a congressman who is a former mayor of the town (and a future US senator), borrows millions of dollars to expand the campus, assuring lenders that there is plenty of money coming in. The money doesn’t come in, although the president has no problem collecting her large salary. Finally she is prevailed upon to resign. Her successor is persuaded to resign by a student mob. Two years after that, the college collapses and ceases to exist. The moral that friends of the college take home with them is that the college was a victim of . . . the capitalist system.

The story is well summarized here. The institution is Burlington College. Its former president is Jane Sanders, wife of Bernie Sanders. The story’s score on the Atlas Shrugged Scale is 9.

Don’t ask me what events would justify a 10. I’m not sure we can take that much satire.




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The Smartest Girl I Know

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When I first met Deja and Zhane, they were living with their mother in a Section 8 housing unit in Yonkers, New York. Their mother was what most people would describe as a “typical welfare mom” — she got a job once in a while, although the risk of losing her benefits if the job didn’t work out made it difficult to get off welfare. But she was proud of those girls! They didn’t go out on school nights, studied hard, stayed away from boys and drugs, and won numerous school awards. When Zhane was offered the opportunity to attend a scholastic camp during the summer, her mother hustled to contact everyone she knew who might be willing to sponsor the girl with a donation of $20, $10, even $5 if they could spare it. I was one of the hustled. More than once. And I was happy to help.

I lost track of the girls when they stopped attending our church, but I ran into Deja recently at the grocery store in my middle-class neighborhood north of Yonkers, where she is working as a clerk and saving money for college. She also works at a Burger King in the evenings, but she enjoys her grocery job better. “I like the customers, and I feel like ‘somebody’ here,” she said. I asked about her sister, and we caught up.

An estimated 40 million Americans are saddled with outstanding student loans totaling over a trillion dollars.

Zhane is also working two jobs, trying to earn enough money to pay off the debts she accrued after one year of college. “She didn’t want to owe all that money,” Deja told me, “so she’s working to pay it off before she goes back to college.”

Smart girl.

According to statistics compiled by the Federal Reserve Bank and the Chronicle of Higher Education, an estimated 40 million Americans are saddled with outstanding student loans totaling over a trillion dollars. Many of them are well into middle age now, with little hope of ever paying off their debt. In fact, student loans are the only debt that cannot be discharged through bankruptcy, and if the loans aren’t paid off by age 65, when Social Security kicks in, payments to Sallie Mae will be deducted off the top. So add student loans to the inevitability of death and taxes — and don’t plan to leave that fancy engagement ring to your heirs, because Sallie Mae will be first in line when your will is probated.

The average student debt is $30,000, but many students owe well over $100,000 when they graduate, and it isn’t unusual today for grad students from Ivy League schools to amass debts totaling over a quarter million dollars. Unless you’re fortunate enough to land a six- or seven-figure job, those loans will never go away. Never.

Deja and Zhane might not be in college yet, but they know the difference between “aid” and “debt.” Other college students aren’t so wise. One of my own students, repeating a required English course for thethird time, was rather flippant when I cautioned her that she was amassing a huge debt without making any progress toward graduation. “I don’t have to pay for it,” she said proudly. Thinking she meant that her parents or grandparents were footing her tuition bills, I reminded her that she should be more respectful of their money. “Oh no,” she crowed, “they don’t have to pay either. The school gave me financial aid!” This poor, foolish girl thought “aid” meant “help.” She had no idea that it really meant, “Let me hold the door for you as you step into a lifetime of debtors’ prison.”

Unless you’re fortunate enough to land a six- or seven-figure job, those loans will never go away. Never.

At the university where I teach, I encourage my students to purchase their textbook, an anthology of classic literature, on Amazon. Cheap, used editions are seldom available at the college bookstore because the book is updated every three years, making the older editions conveniently obsolete. Half the time the new edition is the only option, and they can’t sell it back at the end of the semester because a new edition is usually about to come out. But I don’t care which edition they use. It’s classic literature, after all! Most of my students find the book online for $5 or so (one found it for a penny!), instead of paying $120 for the new edition at the bookstore. However, last semester I received an email from the dean: “Please encourage students to purchase their books at the college bookstore. Remind them that this is to their advantage, as they cannot use their financial aid if they purchase books online.” So let me get this straight: my students are better off borrowing $120 from Sallie Mae and paying 4–8% interest for the next 20 years than they would be if they simply skipped Starbucks for one day and bought the book online with cash? What kind of new math is that?

“Learn now, pay later” is one of the main reasons tuition has skyrocketed in the past two decades. When students can enroll without putting a penny down, they don’t give enough thought to how much it’s going to cost them later, and colleges can raise tuition almost indiscriminately. When our daughter began college at a private southern California university 15 years ago, she was awarded a scholarship that covered 50% of her tuition. We were delighted, and budgeted accordingly as we allowed her to select this expensive school. By the time she graduated four years later, however, the scholarship was only covering 25 % of her tuition, because tuition had doubled in those four years. How can anyone plan for college, when tuition is changing that drastically?

Banks would not be awarding these astronomical, uncollateralized loans to unproven debtors if the government weren’t guaranteeing the loans.

I fear for this generation whose future is being sold for a mess of pottage. Fully 60% of students accept some kind of loan for college, without ever considering the consequences. Most of them are mere teenagers when the university’s suave, educated, comforting grownups tell them to sign their lives away on the dotted line because “that’s the way everybody does it.” After all, it’s financial aid. The government is helping you get ahead. Aren’t you lucky.

I’m not suggesting that these loans should be forgiven. I don’t really have a solution for the 40 million Americans who are already hopelessly strapped with debts they knowingly contracted. I certainly don’t think free college is the answer. But something has to be done. Banks would not be awarding these astronomical, uncollateralized loans to unproven debtors if the government weren’t guaranteeing the loans by making them undischargeable through bankruptcy, and college tuitions wouldn’t be rising beyond the ability to pay if these loans weren’t creating artificial demand.

As I left the grocery store that day I congratulated Deja again on her wisdom in avoiding debt. By saving her own money for college, she is more likely to spend it carefully on a degree that truly interests her, and she’ll study more effectively because she won’t want to waste the money she has worked so hard to earn. She’ll live at home with her mother and sister instead of paying $1,000 a month for dorm life, and she plans to attend community college before transferring to a university, which will also help keep her costs down. She expects to have enough saved to pay for her first year of tuition by September. And she sleeps well, knowing that her savings account, not her loan balance, is growing.

Smart girl.




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Alma Mater

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Do You Speak Political?

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In Alexander Pope’s The Rape of the Lock, several members of the British aristocracy — back when it was an aristocracy — argue about the amorous theft of a lock of hair. A peer of the realm has captured the lock. Sir Plume, another aristocrat, demands that it be returned:

With earnest Eyes, and round unthinking Face,
He first the Snuff-box open'd, then the Case,
And thus broke out — "My Lord, why, what the Devil?
Zounds! — damn the Lock! 'fore Gad, you must be civil!
Plague on't! 'tis past a Jest — nay prithee, Pox!
Give her the Hair” — he spoke, and rapp'd his Box.

“It grieves me much” (reply'd the Peer again)
“Who speaks so well shou'd ever speak in vain.”

I thought of that passage when Drew Ferguson, Liberty’s managing editor, alerted me to the following statement by Timothy M. Wolfe, then president of the University of Missouri, responding to demonstrations about alleged mistreatment of blacks on his campus:

My administration has been meeting around the clock and has been doing a tremendous amount of reflection on how to address these complex matters. We want to find the best way to get everyone around the table and create the safe space for a meaningful conversation that promotes change.

The next day, Wolfe was forced to resign. He had spoken every bit as well as hapless Sir Plume, and yet he spake in vain.

You can see why. If there was ever a meaningless assemblage of bureaucratic buzzwords, Wolfe’s statement was it. “Address complex matters . . . get everyone around the table [query: does that include people like you and me?] . . . safe space . . . meaningful conversation . . . promote change.” It makes you long for just one academic politician to say, “I want a meaningless conversation, so I can get back to my golf game.” That would be honest, at least.

Anyone who speaks this way is either incapable of critical thought or believes that everyone else is. Who among us advocates change without saying what kind of change he means? Who among us wants to have conversations all day, with total strangers, or with people who don’t like us? And who thinks that what university students need is a safe space, as if they were surrounded by ravening wolves, or panzer battalions?

If there was ever a meaningless assemblage of bureaucratic buzzwords, Wolfe’s statement was it.

The answer is, I suppose, “the typical college administrator,” supposing that these people can be taken at their word, which on this showing is very hard to do. If you had something sincere and meaningful to say, would you say it like that?

My suggestion is that everyone who speaks that lingo should be forced to resign, no matter what his job and no matter what the occasion. I’ve had it with stuff like that. You’ve had it with stuff like that. I suspect that normal people all over the world have had it with stuff like that. Even members of the official class now faintly sense this fact, and they’re trying to turn the incipient rebellion against meaningless buzzwords into their own new set of meaningless buzzwords.

Before I give an example, I want to say something about the official class or, in the somewhat more common phrase, political class.

For many decades, libertarian intellectuals have engaged in what I call a two-class analysis. Instead of analyzing people’s behavior primarily in terms of economic classes, they think in terms of a political class and a class of everyone else. So, for instance, Bernie Sanders claims to represent the working class, and Hillary Clinton claims to dote on the middle class, but what they really are is people who crave official power and expect to get it from their class affiliation with other such people — politicians of all sorts, czars of labor unions, ethnic demagogues, environmental poohbahs, denizens of partisan thinktanks, lobbyists for the interests of women who attended Yale Law School, people who share their wisdom with Public Radio, and the like.

Who thinks that what university students need is a "safe space," as if they were surrounded by ravening wolves, or panzer battalions?

The two-class analysis works pretty well at explaining American political culture. But it wasn’t until this year that the phrase political class got into the political mainstream. It happened because the supposed outliers among Republican conservatives started using it. And when such people as Ben Carson used it, it wasn’t a buzzword. It meant something.

But now it has penetrated far enough to produce this:

I’m not gonna be part of the political class in DC. (Jeb Bush to Sean Hannity, October 29, 2015)

Message to the Chamber of Commerce: “Beware! Jeb’s gonna betray you on the immigration issue.” But of course he wouldn’t. He’d just lie about it, as his brother did. The good thing is that for once nobody believed what one of these icons of the official class had to say. The statement was scorned and ignored. Jeb spake in vain.

I suppose he thinks that nobody really understood him. If so, maybe he’s right. He’s used to speaking the language of the political class, and if you do that long enough, you start behaving like people who are trying to speak Spanish and don’t understand that when they think they’re asking where to catch the bus, they’re actually shouting obscenities. They wonder why the audience turns away.

Naturally, the linguistic divide functions in the other way, too. People who speak Political eventually think in Political too, and they can’t comprehend what people who speak a normal human language say or think.

Everyone who speaks that lingo should be forced to resign, no matter what his job and no matter what the occasion.

The process of linguistic self-crippling usually starts early. People learn Political in high school or college and soon are astonishing their friends with strange chatter about advocating for change around issues of social justice, or demanding that their college create a safe space for them, or else they’ll shut the m***** f***** down. To understand such comments, people who speak English must laboriously translate them into their own language, a boring process that they seldom complete. The Political speakers then complain that they are not being acknowledged, that they are not, in fact, being listened to. And indeed, they’re not — because they’re not speaking the same language as their audience, or hearing it.

A couple of weeks ago, Neil Cavuto, the business guy on Fox News, interviewed a college student representing the cause currently being advocated for by a nationwide coalition of students who have been speaking out on campuses throughout the country. Their program calls for a $15 an hour minimum wage for all campus workers, free education at all public colleges and universities, and forgiveness of all student loans.

“Who’s going to pay for this?” Cavuto asked.

There was a long silence. The advocate had apparently never heard those words before. Finally she struggled to answer, in her own language. She said that the hoarders would pay.

Now it was Cavuto’s turn to be surprised. He couldn’t understand what she meant by this strange, apparently foreign, word. When English speakers use those two syllables, hoard-ers, they’re referring to people who pile up supplies of some commodity — whether uselessly, out of obsession, or prudentially, to preserve life or comfort in case of emergency. It turned out, however, that in the young woman’s lexicon hoarder meant “the 1% who own 99% of the country’s wealth.” I know, that was somewhat like saying, “The unicorns will pay for it,” but I want to emphasize the linguistic, not the metaphysical, problem. She had obviously come to exist in a monolingual environment in which hoarders means something quite different from what it means to, let’s say, 99% of the population.

No one gets offended by a foreigner’s struggles with the language of a new country. Native speakers may, however, become upset by people who grew up speaking the common language and then suddenly decide to speak something else, to the bafflement of everyone they’re talking to. Or shouting at. Or lecturing, as if from a position of intellectual superiority. And that, I think, is what’s happening now, all over the Western world.

It turned out, however, that in the young woman’s lexicon "hoarder" meant “the 1% who own 99% of the country’s wealth.”

If you want to see the Platonic form and house mother of the political class, try Angela Merkel. It’s not surprising that her constituents are disgusted by her commitment to lecturing them in a foreign language. Responding to criticism that she has precipitated an uncontrolled flood of immigrants into her country, where taxpayers will be expected to support them, Merkel said it is “not in our power how many come to Germany.” This from a woman who runs a welfare society based on the idea of, basically, controlling everything. To make confusion more confusing, she also said that she and her government “have a grip on the situation.” Like other members of the political class, she left it to her listeners to divine the secret meanings of such terms as “power” and “have a grip,” and to discover when certain arrays of sound mean “I’m just kidding you” and when they mean “No, really, I’m telling the truth this time.”

When you’re trying to decipher a foreign language, you’re not just challenged by the vocabulary. You’re also challenged by those sentences in which you think you understand all the individual words, but there’s still just something about them — something about their logic or their assumptions or . . . something — that continues to elude your understanding. (This is especially true of French.) Sigmar Gabriel, Merkel’s Vice Chancellor and Economy Minister, provided a good example when he reproved people who might be alarmed by the terrorist attacks in Paris, in which at least one participant was carrying Syrian asylum-seeker documents. "We should not,” he said, “make them [Syrian migrants] suffer for coming from regions from which the terror is being carried to us."He appeared to be arguing that because a country generates terrorists we should welcome more people from that country. But that would be ridiculous; he must have meant something else.

Of course, in any language one finds expressions that, one thinks, must be symbolic of broad social attitudes, concepts that are deeply meaningful but that only a native speaker can understand. The difficulty is that there are no native speakers of Political. So when Merkel talks about keeping true to her “vision” and defines that vision by saying, as she said (unluckily) on the day of the Paris attacks, "I am in favor of our showing a friendly face in Germany," her thought remained elusive, even to Germans. What was she talking about? Was she simply babbling to herself?

President Obama’s use of language has long inspired such questions. You know the kind of tourists who inflict themselves on a foreign land, refusing to learn its language, and then get angry at the natives for not understanding them? That’s Obama, and he’s getting worse and worse. On November 21, he visited children in a refugee center in Malaysia and took the occasion to act out his incomprehension of the vast majority of the American populace — the people whom he often, in his own language, denounces as Republicans.

“They [the kids] were indistinguishable from any child in America,” Mr. Obama said after kneeling to look at their drawings and math homework. “And the notion that somehow we would be fearful of them, that our politics would somehow leave us to turn our sights away from their plight, is not representative of the best of who we are.”

More strange Obama statements can be read at the same place in the New York Times.

The repeated somehow (a word to which the president is becoming addicted) signals a profound linguistic divide. Obama marvels at the ordinary language of ordinary Americans. How can they say the things they do? How can they even think them? When they express their fears of such asylum seekers as the Tsarnaev family; when they comment on the many news reports, written in plain English, showing that the vast majority of people now seeking asylum in the West are not little kids from Muslim South Asian families enjoying the hospitality of the officially Muslim South Asian state of Malaysia but young men from the hotbed of Islamic fanaticism, bound for non-Islamic countries; when they reflect that these young men are destined to spend years living on the resentful charity of neighbors who have been forced by their governments to support them — when people speak of these things, Obama interprets all objections, fears, and caveats as the product of a hideous moral deficiency that has somehow insinuated itself into the body politic. Even supposing he’s right on the policy issue — which I don’t think he is — the word somehow is enough to convince most people that he’s no longer speaking their language.

This dawning realization, not just about Obama but about the entire political class, is good news. It means that people are finally thinking about the private language of the political elite. And here’s some more good news, though from an unlikely source.

Obama marvels at the ordinary language of ordinary Americans. How can they say the things they do? How can they even think them?

Last week, I saw an announcement that fellowships are being offered by something called the Center of Theological Inquiry in Princeton, New Jersey. The Center is inviting academics to come and be supported for eight months of research and “conversations” about the “societal” implications of “astrobiology.” The program appears to be supported, at least in part, by those friendly old astrobiologists, NASA.

The announcement begins in this way: “Societal understanding of life on earth has always developed in dialogue with scientific investigations of its origin and evolution.” That’s an assumption that may be questioned. It recalls the typical first sentence of a freshman essay: “Since the beginning of time, humanity has always been troubled by the problem of indoor plumbing.” But the “Societal understanding” sentence goes beyond that — although it’s hard to tell where it’s going, unless one pictures Neanderthals holding scientific seminars about the validity of Darwinism before deciding whether hunting and gathering is a good idea.

Yet the next sentence clearly has a hopeful tendency: “Today, the new science of astrobiology extends these investigations to include the possibility of life in the universe.”

True, the syntax is bad. Investigations don’t include possibilities. But you have to agree with the last part of the sentence: there is some possibility of life in the universe. And I believe that’s a good thing.




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The Tyranny of the Sensitive

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It has been a tough month for free speech on campus. A Yale professor was ostracized for her reasoned response to the campus’ censorship of Hallowe’en costumes. A University of Missouri professor called for “muscle” to oust a student journalist trying to cover a campus protest. And over a hundred Dartmouth students swarmed the campus library to curse and bully other students who chose not to wear black clothing and join their protest. Several professors and administrators have been forced to apologize or resign, while others express nervousness over how to continue challenging their students to think critically and learn well in an environment of increasing intimidation.

This unrest roiling on campuses provided an appropriate backdrop for the documentary Can We Take a Joke? when it premiered at the prestigious DOC NY film festival in mid-November. Apparently, no — we can’t. Not any more. The right not to be offended seems to have trumped the right to say what we think. And young people seem to be leading the way toward censorship and controlled speech. According to Greg Lukianoff, executive director of FIRE (Foundation for Individual Rights in Education), fully 47% of 18–34 year olds said they think the First Amendment goes too far. “That’s terrifying to me,” Lukianoff says.

It should be terrifying to all of us. Penn Jillette observes, “Outrage has become a powerful political tool for shutting down dissenting voices.” Comedian Jim Norton adds, “There is a strange sense of empowerment in being offended.” Jonathan Rauch of the Brookings Institution warns, “One of the first ways you know a society is turning authoritarian is the comedians start to worry. When they start going for the comedians, everyone else needs to sweat.”

The right not to be offended seems to have trumped the right to say what we think.

Well, start sweating, because comedians have indeed become the target. Ted Balaker, director of Can We Take a Joke?, interviews more than a dozen comedians about their experiences not only on college campuses but in comedy clubs and on television. Many tell chilling stories about being shouted down and even threatened with physical violence and arrest for saying things that the shouters consider offensive.

Yet other people go to a comedy show for the very purpose of being outraged and offended. They delight in it. Lisa Lampannelli, known as the “Queen of Mean,” is about as outrageous and offensive as they come. Her act makes fun of every ethnic group and social minority. Nothing is “off the table” for her, including rape, HIV, and cancer. She says she uses humor to help people confront fears and stand up to them. She reports that people will call her ahead of time to say, “My friends and I will be in the fourth row on the right. Please make fun of us!” Others are not so fortunate.

But if you think you’re immune from the Outrage Police because you aren’t a comedian or public figure, think again. Social media has turned us all into public figures. Can We Take a Joke? also tells the story of Justine Sacco, a young woman who tweeted an ill-conceived joke just before boarding a plane from Heathrow to South Africa. By the time she landed, her tweet had spread around the world; her employer had fired her; and angry cybermobs were issuing death threats against her and her extended family. Two years later she still cannot work, date, or go out in public because her unfortunate history is just a Google search away. Jon Ronson, author of So You’ve Been Publicly Shamed, warns, “We are all just one dumb joke away from sharing Justine Sacco’s fate.”

If you think you’re immune from the Outrage Police because you aren’t a comedian or public figure, think again.

Lukianoff laments, “I interned with the ACLU and studied censorship back to the 16th century, but nothing prepared me for how easy it is to get in trouble on the modern college campus.” Comedian Karith Foster adds, “College is supposed to be a place where you grow and explore, where you find out who you are and find your own voice.” Sadly, college campuses are turning into a place where voices are silenced, and it’s coming from the students, not from the administrators. Like many of his peers, comedian George Carlin stopped performing on college campuses. “I hate to say it, but all the censorship is coming from the left. That caught me by surprise,” he said.

Can We Take a Joke? is an important film that asks us to open our eyes to the progress that is lost when voices are silenced by force rather than changed by persuasion. “Words can be offensive and hurtful, but they are not the same as violence and they can be countered by other words,” Rauch reminds viewers. Watch for the film in theaters over the coming months. We also hope to screen it at the Anthem Libertarian Film Festival in July.


Editor's Note: Review of "Can We Take a Joke?," directed by Ted Balaker. The DKT Liberty Project, 2015. 75 minutes.



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John Kerry Speaks!

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At many colleges and universities across this great land of ours, graduation weekend has just passed. Amid the festivities and regalia and good-hearted celebration, that meant the return of one of our most dreaded civic traditions: the commencement speech. For those fortunate enough to have avoided these in recent years, the commencement speech has become the chief opportunity for would-be public intellectuals to spout truisms and feel even more self-important than usual.

Case in point: one of this site’s favorite bloviators, John Kerry. Invited to speak at Yale’s Class Day, presumably on the strength of his sterling undergraduate record, Kerry produced a masterpiece of vacuity, making a case for how urgently the students needed to trust their “instutitions,” by which he meant the government. In addition to the expected lame jokes and the kinds of cultural references that dads make to try and pretend they’re still cool, Kerry indulged in his habitual verbal offenses:

  • word salad, such as rallying students to “galvanize action to recognize felt needs” (translation: “we need to spend lots of money meddling with people”);
  • doublespeak, such as “We cannot allow a hangover from the excessive interventionism of the last decade to lead now to an excess of isolationism in this decade.” (translation: “especially meddling with people in other countries”);
  • bumper stickerism, such as “None of our problems are without solution, but neither will they solve themselves” (translation: “our meddling can solve anything”); and
  • dubious assertions, such as “Participation is the best antidote to pessimism and ultimately cynicism” (translation: “never doubt even for a moment that meddling isn’t the right thing to do”).

Thing is, by graduation-weekend standards, Kerry’s speech is only half bad—I’ve survived much worse. What’s happened this year that has given me hope is students finally getting fed up and fighting back. At a number of schools, the student body banded together to reject the speaker being foisted on them. This move has brought howls from the sorts of writers who hope themselves one day to deliver commencement addresses. But why submit yourself to listening to a half hour from an architect of the Iraq War, like Condoleeza Rice, or a defender of forceful police coercion against nonviolent student protestors, like Robert Birgenau, if there’s any alternative? Graduations are a time for students to celebrate with friends and family, a chance to reflect on years past and look forward to years future. Nothing about that requires the importation of big-name outside speakers—especially those whose fame depends on the degree to which they’ve intruded themselves into the lives of others.



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Non-Starters

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President Obama recently made a whirlwind tour of colleges and issued a series of proposals for making college more affordable. On the good side, his speeches spurred public discussion about the problems of higher education, especially its costs. On the bad side, they deflected attention from the causes of the problems.

U.S. higher education has been providing questionable products at high costs for years. Under the Bush administration, Secretary of Education Margaret Spellings tried to address the weaknesses with a special commission on higher education. Among other things, the commission proposed requiring schools to report their students’ learning outcomes. (That is, did they learn anything?) This caused something of a stir among universities, which scurried to create a voluntary program of “accountability” — briefly. The urgency faded away, especially when university lobbyists got Congress to forbid the Department of Education from making too many demands.

It was only with the 2008 crash and recession that the public took notice of higher education again. The economic downturn revealed that many college graduates, some with mindnumbing debt loads, were not able to get jobs. That public notice meant that President Obama would not be far behind.

Unfortunately, Obama’s recommendations are superficial. The centerpiece is the idea of rating colleges on affordability, graduation rates, and access to low-income students. That’s not very much different from the College Scorecard that the Department of Education issues now. The department even has a “hall of shame” — an annual listing of colleges that have too-high tuition or that raised their tuition too much. These efforts don’t seem to have had much of an impact, although more information is generally a good thing.

Obama wants to use the rating system to reward the schools that score well. He would provide higher Pell grants to students at schools that have both high graduation rates and high percentages of low-income students. But it is simply a fact that high percentages of Pell grantees are correlated with lower graduation rates. To have both a high percentage of Pell grantees and high graduation rates would probably require gaming through grade inflation (and grade inflation is already a problem).

Fundamentally, President Obama is trying to “fix” college problems through regulation and legislation, without changing the underlying incentives that push costs up at most schools. It does not take rocket science to diagnose what is wrong with higher education.

Essentially, too many students are going to school who don’t want to, who don’t benefit, and who don’t learn enough to justify high wages. The national mantra that “everybody ought to go to college” is reinforced by federal grants and loans (and, until recently, federal guarantees of private loans).

This artificial demand, a lot like the artificial demand for housing in the mid-2000s, enables colleges to keep pushing up their tuitions. They do this shamelessly because they are spending for education, which is “priceless.” Furthermore, most colleges are either government-owned or nonprofit, and thus there is no pressure to make, or even identify, a profit. The result is that all revenues are spent, and the hard task of controlling costs is ignored (again, education is “priceless”). Since there is no market for control (economists’ words for potential buyers scrutinizing a company to decide whether they can run it more efficiently and thus profitably), there is no pressure to keep prices down . . . as long, of course, as there is this continual demand.

With these university characteristics firmly in place, the president’s proposals are window-dressing. And it’s unlikely that Congress will pass any of them.

In closing, I should say that one of Obama’s suggestions is a good one: He thinks that students should not be able to get additional Pell grants if they have not completed a specific number of courses within a certain period of time. That would be a start in reforming the $30-billion-a-year Pell grant program — but only a start. Much more needs to be done.




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Football? Why?

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Me? I like tennis, a much more gentle and gentlemanly sport than the current favorite, football. Knocking people down takes little skill. Pounding a “down the line” passing shot that just ticks the line takes super hand-eye coordination. Notice that in football the home team fans are encouraged to hoot and scream like the lynch mob in front of the jailhouse, to drown out the quarterback’s signals. Contrast that with the silent courtesy given to the server even if you’ve got 50 bucks riding on the match against him.

So — a brief note on college football. I used to be a fan. (And the origin of that word, by the way, is not “fanatic,” but “fancier.” People arefanciers of the University of Alabama.) I used to enjoy the game, although I never saw a defensive tackle turn to the ref, shed a tear, and mumble, “I held No. 33.” But I’ve seen McEnroe overrule the ump: “No, his ball was in.”

Then I realized that while to me football is entertainment, to students it’s a distraction and corruption. Colleges are institutions supposedly dedicated to the education and maturation of youth. I assume that’s the wellspring of their nonprofit status. But football, in its current form, downplays sportsmanship. It recruits — in most cases — large, fast, violent young men who specialize in using their large, fast, violent bodies to knock down and inflict serious injury on opponents. This is not exactly a lesson in sportsmanship or human relationships. Our colleges accept this anomaly in their mission because a stultified public allows it. And in many cases a gang of alumni — who evidently got a lousy education — sponsor it. The G-d of mammon — not learning — reigns. The lure of reinforced endowments and bulging bank accounts is irresistible. Who said that colleges’ nonprofit status carries over to sports and other athletic activities? A courtroom full of lawyers could debate that for a semester or two.

Coaches make millions — much of it from my taxpayer pocket. It should be an optional item on my tax form. And after all, it seems only fair that if the school makes a profit, I should get a proportionate refund.

But money is not the main issue. (Most schools lose money on their athletic programs.) It’s the disproportionate emphasis on sports, which might involve 1 to 2% of the student body, versus the rest, who are purchasing the school’s educational products. If I’m going to be a drunken spendthrift with institutional money (and remember, nobody spends your money like it’s their own), I’d rather pay two million to the head of the engineering department than two million to the football coach.

Which skill is more important? Creating a bridge, a new concept of combustion engines, a new source of energy — or whacking an anonymous opponent, which sounds a lot like modern warfare? And don’t think that the coach tears up and shouts at the defensive tackle who breaks the leg of an enemy quarterback, “Oh, dear, you broke his leg. His incompetent backup will have to finish the game. I so wanted to go against their first team.” Such lines are never spoken on the gridiron battlefield. Sportsmanship is a rare commodity. And winning, as misspoken by some coaches, isn’t everything. You learn from losing, too. And life is full of losing as well as winning.

I only scratch the surface. But you get the idea. Why are colleges in the entertainment business? Certainly not for the benefit of their primary customers. It’s as though the municipal fire department held courses in arson, on the side.




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There’s No Such Thing as a Free Education

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The refusal of the Senate to accept a measure that would keep interest rates artificially low on government-subsidized student loans should be an encouraging sign. The senators who voted against the measure, and those in the House who said they will do the same if the bill makes it to them, understand that government intervention leads to unintended consequences. In this instance the unintended consequence of government intervention — in the form of manipulating interest rates — has been an increase in the cost of post-secondary education.

Money is a commodity. Interest rates reflect the price of that commodity. A borrower pays a price, in the form of interest, to the lender. The price of a commodity reflects what a borrower is willing to pay and what the lender is willing to accept. Numerous factors go into setting a price. But at the most basic level, supply and demand will set the appropriate price so that market equilibrium can be reached. As demand goes up, price will go up until the supply matches the demand. If there is an oversupply, demand decreases as too do prices.

Education and training are necessary for a productive workforce — but the right kind of education and training, not a generic form.

However, when the government interferes with markets, signals are distorted and equilibrium cannot be achieved, as supply and demand are not allowed to react to one another naturally. By keeping interest rates low the government has created an artificial demand for higher education. In this particular instance the cost of borrowing money in the form of a Stafford loan is cheaper than it ought to be, which means that more students will borrow money. In a free market these people may have found their way into the workforce or a technical college, but now they are pursuing four-year degrees which may or may not help them in the long run — just because the money is cheap. The result is that colleges now have more customers, i.e. students, demanding their services. In response they raise their tuition, because as demand goes up price goes up as a result.

The effect of government’s making college more affordable by keeping interest rates artificially low is a higher cost of education. This not only makes for a greater debt load for graduates who take government subsidized loans but also prices middle-class students out of education. This means that they too will have to resort to taking out loans and unavoidably piling on debt. It is a vicious circle that can only be avoided if interest rates are allowed to follow market principles. In that event, the accurate price will be charged for borrowing money and for the cost of education.

The nation’s single minded pushing of four-year degrees on our youth has had deleterious effects on the development of our workforce. Students who would flourish with training in the industrial arts are being pushed to a four-year degree that may or may not land them a job or match their natural aptitudes. There is a lack of economic sophistication and a sense of humanity in our pursuit of making sure that students move through our higher education system as if on a conveyor belt.

Education and training are necessary for a productive workforce — but the right kind of education and training, not a generic form. Only the market can determine what the right kind of education and training is, and only a system that allows flexibility will encourage students to match their aptitude with their financial aspirations.

Those who support keeping interest rates artificially low for government subsidized student loans do so because they think that keeping rates low will make college more affordable. They therefore castigate opponents for being against the expansion of higher education. This is a cheap argument that ignores market fundamentals and sidesteps a substantive debate. The time for that debate is now.




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Good News about Hispanic Grads

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Amid the ever-spreading presidential scandals, the country is focused on bad news in DC. So it is gratifying to report some good news nationally. The news is about a major improvement in Hispanic educational outcomes.

A report just released by the Pew Research Center shows that for the first time, a higher percentage of Latino high school graduates — an impressive 69% — is enrolling in college for this fall than are graduates identified as “white” (at 67%). Since the beginning of the 2008 recession, the percentage of Hispanic grads enrolling in college has steadily grown, while the percentage of whites has declined slightly.

More importantly, in 2011, the percentage of Latinos dropping out of high school hit a new low. Only 14% of Hispanics (aged 16 to 24) were dropouts, which is half the rate of a decade earlier (it was 28% in 2000). The dropout rate among whites also fell, from 7% in 2000 to 5% in 2011.

The Pew report suggests that this dramatic increase in Hispanic educational attainment is likely due to two factors. First, Hispanic families are increasingly cognizant of the fact that America has a completely knowledge-based economic system. A recent (2009) Pew survey found that nearly nine out of ten Latinos aged 16 or older agreed that a college degree is necessary to rise to the top in today’s economy, which is a much higher figure than that for the general population (of which only three out of four agreed with the proposition).

Second, the recent recession hit Hispanic youth harder than it did white youth. Since the recession started, unemployment among Latino youth (defined as ages 16 to 24) has gone up 7%, as opposed to only 5% among white youth.

Indeed, while the Pew report doesn’t note this, Bureau of Labor Statistics (BLS) data show with crystal clarity the correlation between educational attainment and unemployment. For example, the BLS records that the overall unemployment rate for the year 2005 was about 5%. But within that general figure was a wide difference among workers. For those with professional degrees, unemployment was a miniscule 1.1%; for those with doctoral degrees, it was only 1.4%; for those with master’s degrees, 1.7%; for those with bachelor’s degrees, 2.3%; for those with associate’s degrees (community college degrees), it was 3.0%; for those with a high school diploma and some college, 3.9%; among those with only a diploma, 4.3% — still below the national average unemployment rate for the year. But among workers with no high school diploma, it was 6.8%, or over a third higher than the national rate. Even in a boom economy, high school dropouts are dramatically more likely to be unemployed.

And in 2009 — a year when the unemployment rate was 7.9% — the BLS data show that the employment gap between those with little education and those with more only widened further. That year, the unemployment rate among workers with professional degrees was 2.3%; among those with doctoral degrees, 2.5%; master’s degrees, 3.9%; bachelor’s degrees, 5.2%; associate’s degrees, 6.8%; a diploma and some college, 8.6%; a high school diploma alone, 9.7%; and no diploma, 14.6%. This means that in a time of high unemployment, the unemployment rate among high school dropouts was nearly double the national average.

There is still work to be done to bring Hispanic educational attainment up to equality with that of whites. To begin with, while the Latino dropout rate has fallen by half during the last decade, it is still nearly three times the rate for whites.

Moreover, Hispanic students are still less likely than white students to enroll at four-year colleges, by a wide margin — 56% versus 72% — and are less likely to attend full-time, or graduate with a bachelor’s degree.

And of course, both Latinos and whites trail Asians when it comes to enrollment in college: recent Asian high-school grads are enrolling in college at an astonishing 84% rate.

Still, the Pew report is very welcome news. One hopes that the members of Congress still desperately fighting immigration reform will read it, and think it over.




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