Hillary Clinton’s ‘New College Compact’ Raises An Important Question: Did She Ever Take Econ 101?

Editor’s note: This article first appeared at Forbes.com.

Today’s version of “a chicken in every pot” is Hillary Clinton’s proposed plan to “make college affordable and available to every American.” This is political catnip, pure and simple. And it is a more delusory form of catnip than Herbert Hoover’s “chicken”; for while everybody needs enough to eat, not everybody needs to go to college.

There is today an oversupply of college degrees. A Federal Reserve study found that half of recent graduates were working in jobs that didn’t require a college degree or not employed at all. For Mrs. Clinton to propose spending $350 billion to subsidize college attendance will exacerbate rather than reduce the glut of college-educated Americans. To propose such wastefulness when federal debt already exceeds $18 trillion is fiscally irresponsible and a slap at American taxpayers. It will also increase the number of graduates experiencing disillusionment when they realize the lack of market demand for their degrees.

The increasingly overt socialistic nature of Mrs. Clinton’s campaign theme is glaringly evident in her “New College Compact.” She laments: “For too long, families have been left to bear the burden of crushing costs” of a college education. Heaven forbid that Americans be expected to pay for what they consume! (A quick “thank you” here to those whose generosity funds academic scholarships to highly qualified and motivated students from poor backgrounds.) Who does Mrs. Clinton think should pay if not the consumer? Her plan explicitly specifies that the federal and state governments (i.e., the taxpayer) should foot the bill at public universities and colleges.

Along with state financing, Hillary Clinton advocates increased state control. She thinks that government should micro-manage post-secondary institutions by telling colleges where they must spend their money (less on administrative expenses), commanding colleges to accept junior college credits (regardless of the four-year colleges’ own academic standards), and deciding when to waive accreditation standards.

Clinton’s disfavor of the private sector is obvious: She expresses sympathy for students with “an expensive degree from a for-profit institution,” only to find that a degree doesn’t lead to a job. Why single out graduates of for-profit colleges and universities when the same disappointment befalls many graduates of not-for-profit institutions, too? And why should students who agree to work for government receive earlier cancellation of their debts than private-sector workers? That’s a double-whammy on the taxpayer, whose taxes first would subsidize the student’s education and then pay the student’s salary after college. And why is it necessary for government to make sure that community colleges offer more “two-year degrees and certificate programs that are valued by employers”? Why can’t private educational entrepreneurs survey the marketplace to discern what degrees and certificates are valued and then profit by providing them?

As for the horrendous problem of college debt blunting the lives of millions of younger Americans, Clinton doesn’t acknowledge that the federal loan program is responsible. If she were not so ideologically averse to the private sector, she might see privatization of the college loan market as the solution. First, though, bankruptcy laws should be revised to include college debt. It is anomalous and unjust to allow mature adults with decades of business experience to erase their debts via bankruptcy if they make a miscalculation, but to deny such mercy and financial relief to young, inexperienced adults. If private lenders issued college loans, and they knew that bankruptcy was an option for young borrowers, then those lenders would calculate that risk. They wouldn’t lend tens of thousands of dollars to students floundering for five or six years or students taking courses that have little value to the job marketplace, and so the glut of over-educated/under-employed young people would shrink.

There is one aspect of Clinton’s higher education plan that makes some ethical, if not economic, sense. Ethically speaking, it seems unfair for the Fed to have engineered low borrowing costs for Uncle Sam while at the same time not sharing some of its windfall by refinancing student debt at lower rates. (Many students are still paying off loans at seven, eight, or nine percent.)

Economically speaking, though, Hillary Clinton has no business promising that the federal government “won’t profit off student loans.” While “profit” apparently is a dirty word to Clinton, any loan program should generate enough interest income to pay for the salaries, offices, etc., of those administering the loan. If the federal college loan program doesn’t cover its own costs, then, once again, the long-suffering taxpayer gets stuck with those costs. The economically rational approach is to let the private sector figure out what an economically viable loan market for college education looks like. Economic losses to our society would decline by billions if privatization of student loans supplanted the socialistic status quo.

The New College Compact proposed by Hillary Clinton is economically wasteful central planning, all wrapped up in the beguiling garb of Santa Claus politics. Caveat emptor. Let the buyer (in this case, the American taxpayer and voter) beware. There ain’t no such thing as a free lunch.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

Time For A Supine Congress To Reassert Itself

Congress is one of the least respected institutions in the United States. A Rasmussen Reports phone survey published last month “finds that just 13% of Likely U.S. Voters think Congress is doing a good or excellent job overall, while 56% rate the current Congress poorly.” 13% is lousy, but it is almost double the 7% rating of a year ago when the memory of the Senate’s dysfunction under former Majority Leader Harry Reid was fresher.

Congress’ reputation suffers for a multiplicity of reasons, including hypocrisy, perceptions of corruption (e.g., enriching themselves at public expense or selling themselves to the highest bidder), the pervasive nastiness of venomous rhetoric, etc.; but from my perspective, Congress’ biggest problem is disloyalty to the Constitution stemming from political cowardice. For decades, Congress’ members have abdicated their constitutional prerogatives. Rather than honoring their oath to uphold the Constitution and its system of checks and balance, a majority of members have chosen the path of least resistance by delegating or ceding to others the often-unpopular decisions that the people’s representatives are supposed to make.

Congress has ceded power to the Federal Reserve and sundry multilateral institutions like the IMF, UN, et al., as well as to the other two branches of the federal government—the executive and judicial. I’ve taken on some of the multilaterals elsewhere. Today, I’ll suggest several steps Congress could take to reclaim some of its rightful power from the other two branches of government in Washington, and thereby possibly earn more respect. Admittedly, the steps I will propose won’t come to pass as long as a “progressive” is in the White House.

The executive branch has been steadily usurping congressional prerogatives for decades. The process has accelerated markedly during the Obama presidency–think EPA, BLM, NLRB, FCC, etc. Here are four policies designed to curb executive-branch power that congressional Republicans should vote into law in early 2017 if they are fortunate enough to retain the House and Senate and win the White House next year:

1) John Stossel’s important special “Green Tyranny” showed how the EPA has been cramming loathsome propaganda down the throats of our children in public schools. It’s worrisome enough when the Department of Education seeks to centralize educational standards in Washington, but for other agencies that weren’t even chartered for educational purposes to develop and impose our public schools’ curricular content is unacceptable. Congress should shut down the Office for Environmental Education that Congress itself unwisely created in 1990 and defund all indoctrination programs within the executive branch.

2) Earlier this summer, Investor’s Business Daily reported that the Consumer Financial Protection Bureau and the Department of Justice both have collected tens of millions of dollars in fines from private corporations and then disbursed the funds collected to various “activist” organizations. While a worthy ultimate goal would be the abolition of the unaccountable, undemocratic CFPB, the least Congress should do is pass a law that any funds collected as fines by the executive branch shall be deposited with the U.S. Treasury so that Congress (which has the constitutional power of the purse) may determine the disposition of those funds. (For the record, Congress shouldn’t be in the wealth redistribution business either; but at least members of Congress can be voted out of office, whereas officials of DOJ, CFPB, etc., are insulated from the electorate.)

3) Much mischief has come out of the incestuous relationship that Milton Friedman dubbed “the iron triangle.” This is the loop whereby special interest groups lobby Congress for more spending, a pliable, complicit Congress then increases appropriations to particular agencies, and then the agencies grant that money to the special interest groups that lobbied for the spending increases so that they can keep lobbying for another round of spending increases. The taxpayer is the perennial victim of “the iron triangle.” Congress could end this scam by forbidding federal agencies from giving grants to special interest groups (whether profit-seeking corporations or not-for-profit organizations) and cutting from agencies’ budgets the full amount they currently spend on such grants.

4) Here’s the big one: Of the flood of rules coming out of Washington that Americans must obey, fewer than 5% are laws passed by our elected representatives in Congress; the other 95% are promulgated by unelected, undemocratically unaccountable bureaucrats in the executive branch. Again, this is Congress’s fault. Decades ago, Congress adopted the policy of allowing executive branch agencies to promulgate regulations that take effect automatically unless Congress specifically votes against them within 90 days. Members of Congress rarely have time to read every word in the laws they pass (remember Obamacare!), much less every regulation that comes down the pike–and so lots of lousy regulations slide through. Congress needs to reverse the process: Instead of a rule becoming the law of the land unless Congress says it isn’t, nothing should be the law of our land unless Congress says it is. One of the fundamental constitutional principles is that Congress is the legislative—the law-writing—branch of government. It’s time to cancel the executive agencies’ virtual blank check to impose rules upon us.

Besides Congress, the Supreme Court also recently intruded on Congress’ legislative prerogative when Chief Justice Roberts stated in his opinion in King v. Burwell that the phrase “state exchange” in the Affordable Care Act really meant “a state or federal exchange.” House Speaker John Boehner won’t push back and risk media outrage, but a bolder congressional leader would call for a vote to amend the ACA by inserting language stipulating a federal exchange. Then, if Congress explicitly refused to adopt such language, the Supreme Court would be in the position of insisting that Congress adopt a provision that it explicitly voted not to adopt. With Obama taking SCOTUS’ side, the Court’s reinterpretation of the law would stand; but then the Speaker could rebuke the Court by presenting a motion to censure Mr. Roberts.

Come on, Congress! Push back. Assert your constitutional prerogatives and regain your relevance.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

The ‘Not Enough Jobs’ Scenario: An Economic Fallacy (But Possibly An Accurate Forecast)

Editor’s note: This article first appeared at Forbes.com.

Once again, a scholar with impressive credentials is broadcasting the gloomy notion that Americans face a job-poor future. The insufficient-jobs scenario appeared in George Mason University economist Tyler Cowen’s book “Average Is Over a couple of years ago. It resurfaced again recently in the Pittsburgh Tribune-Review. Vivek Wadhwa, “a fellow … director of research … and distinguished scholar” at several prestigious universities, wrote that we need “a new version of capitalism” for “dealing with our jobless future.”

The crux of Wadhwa’s argument is his belief that technological progress will result in a society divided between a technologically savvy elite, who will prosper mightily, and a larger number of Americans whose jobs will be rendered obsolete and won’t be able to find new jobs. There’s an obvious fallacy here: If technological progress reduces employment opportunities, then why are hundreds of millions of people still working in the technologically and economically advanced countries of the world? What is it with these intellectuals and the recurring nightmare that progress results in a dearth of jobs?

An incident that the late economist Milton Friedman related comes to mind: While visiting a populous but undeveloped Asian country several decades ago, Friedman saw a gang of workers using shovels to excavate a hole where a building’s foundation would be laid. Friedman noted that the job would be completed much more quickly if a modern excavating machine were used. His host replied that a deliberate decision had been made not to use such a machine because the government wanted to maximize employment. Friedman’s rejoinder was to the effect that if the goal were to maximize employment in the country, they should ban the use of shovels and equip a far larger number of laborers with spoons. It doesn’t require great vision to realize that a fully employed nation of spoon-wielding ditch diggers would remain a very poor place.

Can anyone doubt that technological progress has led to economic advancement? The economic principle is elementary: As worker productivity increases (that is, as more wealth is produced from fewer units of labor) prosperity rises, too. When improved agricultural productivity has bankrupted farmers and resulted in our food supply being produced by an ever-smaller percentage of Americans, what has happened to all those ex-farmers? They found employment in new fields, thereby increasing the number and variety of goods and services produced. In other words, more wealth was created; and that is how a society achieves higher standards of living for the masses.

What has just been described is Schumpeter’s process of creative destruction. Old jobs that produce things of less value become obsolete, and new jobs producing things of higher value take their place. This is the natural evolutionary course of free markets.

Any notion that there is a ceiling to the number of potential jobs ignores an elementary and undeniable economic truth—namely, that there is no limit to the potential number of jobs because there is no limit to mankind’s wants. As technology makes it possible to produce what are considered the modern necessities of life (cars and cell phones in addition to the traditional necessities of food, clothing, and shelter), more workers will be available to produce and provide new goods and services that entrepreneurs are dreaming up every day of the year.

Is there anything that can inhibit or halt the natural tendency of entrepreneurs in market economies to generate new job opportunities? Yes, indeed. Government intervention—excessive and costly regulations, wealth-and capital-depleting taxation, misallocation of resources via government spending programs, depreciating currency, etc.—can stifle economic activity, discourage business formation, and cause job opportunities to dry up.

What is scary about Wadhwa’s thesis and related plans (such as Hillary Clinton’s proposal for government to lay a heavier, more controlling hand on American entrepreneurs and businesses) is that their ill-conceived policies will produce results opposite to what they claim to be seeking. There will be less employment instead of more.

When Wadhwa says we need a new “capitalism” that redistributes more wealth and provides everyone with a taxpayer-supported guaranteed income, he is doing two destructive things: First, he is perpetrating a pernicious lexicographical hoax, proposing a new form of statism that is a repudiation of free markets—i.e., that is anything but “capitalism.” A more honest statement would be “It is time to replace capitalism with greater government control of economic activity.” The second destructive aspect of his suggestion is his apparent blindness to the fact that maximum economic freedom—true capitalism—is the world’s best hope for expanding job opportunities. To jettison capitalism and replace it with a greater degree of statism will impede economic growth, squelch the growth of businesses, and consequently hinder job creation, to the economic detriment of those who are hoping for jobs.

There will be enough jobs for Americans only if the political planners surrender their mad ambition to direct the economy from Washington.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

Is Obama Really To Blame For Weak Economic Growth?

Editor’s note: This article first appeared at Forbes.com.

A political science colleague sent me an article documenting President Obama’s dismal economic record, and he asked me for added details and perspective. Here goes:

True, economic growth under Obama has been sluggish, fitful, faltering, historically weak, etc. However, if you look at the charts in the article—especially the second and third—you can see that U.S. economic growth has been trending downward for several decades. Conclusion: Our economic woes did not begin with Barack Obama. However, he has done nothing to reverse the trend; on the contrary, he has doubled down on the very policies that have hampered economic growth.

The headwinds opposing economic growth are generated by what Ronald Reagan referred to as “the government disease.” No president has advocated, championed, and imposed more harmful government intervention than Barack Obama.

Here’s a short list of those interventions:

1.) Government spending. Economists as far back as Adam Smith have noted that the true burden of government is what it spends, not what it taxes. When political decisions about where to allocate scarce economic resources supplant market decisions, production inevitably is diverted from the most highly valued needs to less valued things. Thus, less wealth is produced, economic growth is suboptimal, and the people are poorer than they otherwise would be.

While not having increased federal spending by as large a percentage as his predecessor, Obama undeniably has presided over more market-distorting government spending that any of his predecessors. To be fair, some of this spending was already baked into the cake—particularly the rising spending on Social Security and Medicare. Because federal entitlements operate on a “pay as you go” basis, these increasing expenditures to seniors do not consist of real economic returns on capital invested. Instead, they transfer hundreds of billions of dollars from current workers to mostly retirees. Entitlement expenditures artificially inflate GDP and overstate the real wealth of the country because those dollars represent purchasing power that does not arise from the production of actual goods or services.

2.) Rising debt. The greater the debt load, the more present income is diverted from present consumption to pay for past consumption. After a brief downturn following the 2008-9 financial crisis, total debt has risen by over 15 percent to a shade over $59 trillion, according to the Federal Reserve. Over half of the $7.35 trillion increased (some $4.84 trillion) is government debt stemming from Obama’s budgets.

Obama’s policy of encouraging and facilitating loans to college students has seen student debt soar to over $1 trillion with devastating economic consequences for the recipients. Young graduates struggling under the burden of debt have delayed marriage, child bearing, home buying, etc. In too many cases, college debt has stunted young American lives.

3.) Suffocating regulation. The Obama administration has burdened Americans with a record amount of federal regulation as measured by the number of new rules promulgated and pages in the Federal Register. The annual cost of the federal regulatory burden is now approximately $1.9 trillion (only nine countries’ GDPs are larger). As reported in Investor’s Business Daily, “the cost of enforcing federal economic regulations is … up 31 percent since Obama took office, and the ‘Code of Federal Regulations’ is 17,294 pages longer.”

Furthermore, as noted by Obama’s Council on Jobs and Competitiveness, the Sarbanes-Oxley law (which Obama inherited, but has not revised) and Dodd-Frank (which a Democratic Congress passed in 2010 with Obama’s approval) have “placed significant burdens on the large number of small companies.” Consequently, we are in the unusual and worrisome situation of businesses closing at a faster rate than they are opening, thereby shrinking employment opportunities and slowing economic growth.

4.) Tax policy. Business tax rates have remained unchanged under Obama, and that has had negative consequences in a world that has been shifting toward lower corporate profit taxes. By allowing the United States to have the highest corporate tax rate in the developed world, American businesses are migrating abroad via the corporate inversion maneuver.

5.) The war on work. While constantly professing concern for workers, Obama has consistently supported and implemented policies—ranging from a higher minimum wage to federal jobs programs to anti-business policies—that have shrunk the number of jobs (see the Labor Force Participation Rate). Obama’s prize legislative achievement, the Affordable Care Act, has shrunk the number of hours worked (and consequently the amount of wealth created) by incentivizing employers to reduce the number of full-time jobs. According to David Stockman, the United States has two million fewer full-time workers now than it did in 2007.

Bottom line: President Obama’s policies have crippled the American economy.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

Memorial Day: Remembering Loyce Deen Of Altus, Oklahoma

I’ve written in the past about how my Pop carried with him a haunting memory from his time aboard the aircraft carrier Essex in World War II. Anti-aircraft fire had killed a turret gunner during a sortie. Pop, whose job it was to repair and prepare planes for the next mission, went up to inspect the plane as soon as it landed and saw the gunner’s body. At Pop’s recommendation, the captain of the Essex gave the order to bury the man in the plane in which he had given his life for his country. This burial at sea was unique. It was the only time during World War II that a valuable plane was ordered to be used as a coffin.

The burial itself was filmed and included in the 1950s series, “Victory at Sea.” Pop saw it for the first time when it was rebroadcast 20-25 years ago. Seeing that on the Essex dredged up disturbing memories of what Pop had seen on that long-ago day, and for years afterward he would retell that vivid story many nights after consuming copious quantities of Jim Beam.

The story didn’t end for me with Pop’s passing in 1999, because several years later, I stumbled onto a website about the airman who was buried in his plane. Suddenly, I knew many more details. His name was Loyce Edward Deen of Altus, Oklahoma. The fatal flight took place on November 5, 1944 in the Battle of Manila. The three-crew plane was the Grumman TBM (torpedo bomber) V-15.

The website provides interesting and touching details about the young Oklahoman. Loyce was his parents’ seventh child. He was followed four years later by one last sibling, a brother with Down’s Syndrome. Loyce was very close to his kid brother, who sadly died when Loyce was in eighth grade. Three years later, his mom had a stroke. Loyce helped care for her until she passed away about a month later.

In 1942, Loyce joined the Navy. On October 24, 1944, his foot was wounded by shrapnel in the Battle of Leyte Gulf. Heroically, he simply wrapped his foot and continued to fight on both the 24th and 25th. At the end of the month, Loyce had the option of recuperating on a hospital ship until his foot mended, but he insisted on staying with his two crewmates, pilot Lt. Robert Cosgrove and Radioman Digby Denzek. Character, courage, loyalty and love—Loyce Deen had them in spades. It was people like him who made the USA great.

The next week, at the age of 23, Loyce was killed instantly when [this is graphic folks, so you may wish to skip to the next paragraph] anti-aircraft fire decapitated him. It was that jarring, gruesome image that haunted my Pop. One memorable detail is the stoicism of Loyce’s crewmates. Denzek reported to Cosgrove over the intercom that “Deen was hit bad.” “Hit bad”—what a compassionate and wise euphemism. Denzek didn’t want to grieve or distract Cosgrove with the 24-year-old pilot already facing the nerve-wracking task of flying a damaged aircraft two anxious hours back to the Essex.

I feel like I knew Loyce Deen, even though our lifespans didn’t overlap and I’ve never met anyone who knew him. “Knowing” him has made a significant difference in my life. The most important male relatives in my life all saw combat in either World War II or Vietnam, but (thank you, Lord) none were killed in action, so for me, Memorial Day was always more of a general than a specific remembrance. That all changed when I found the Loyce Deen website. My Memorial Days are now fuller and more meaningful than before because Loyce crossed paths with Pop.

I‘m sure the descendants of Loyce’s brothers and sisters know what a good man and great hero their great-uncle was. Through this article, I hope many more people will know about him. On Memorial Day 2015, this solemn, reverential holiday, may all patriotic Americans honor the memory of tens of thousands of America’s best—people like Loyce Deen—who gave their lives that we and countless others might live in liberty. God bless them all.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth