Tag: obama

Obama to Control the Price of Ivy?

Superabundant federal student aid has done a huge amount to get us into our bankrupting college mess. To get us out, today President Obama will propose, essentially, “soft” price controls. But they will likely leave the root problem intact while, if anything, adding new kinds of woe.

On his college bus tour, President Obama will propose that Washington start publishing ratings of schools based on such measures as average tuition, graduation rates, debt and earnings of graduates, and the percentage of a college’s students who are low-income. The ratings would also “compare colleges with similar missions.” Ultimately, the president will propose that the availability of aid be partly conditioned on the new ratings.

Let’s be clear: The price of college is almost certainly far higher than it should be, fueled largely by federal aid that essentially tells colleges “charge whatever you want – we’ll give students the money.” That’s a major reason that average, inflation-adjusted prices have more than doubled in the last 30 years. And it is good that the president, and many others, are essentially acknowledging the inflationary reality of aid. But will price controls help or hurt?

Four Charts Showing How Obama’s Statist Agenda Is Hurting Jobs and Growth

President Obama made a much-hyped pivot-to-the-economy speech yesterday in Chattanooga, Tennessee.

I already explained, immediately following the speech, why his “grand bargain” on corporate taxes was not a good deal because of all the hidden taxes on new investment and international competitiveness.

But I also had a chance to dissect the President’s overall track record on the economy for today’s Chattanooga Times Free Press.

Here’s some of what I wrote.

…he didn’t say anything new or different. His audience was treated to the same tax-spend-and-regulate boilerplate that the President has been dispensing ever since he entered political life. …with Obamanomics, not only has America failed to enjoy the traditional period of four-to-five percent growth at the start of a recovery, the economy hasn’t even gotten close to the long-run average of 3 percent. That’s a damning indictment. But it gets worse. The data on employment is downright depressing. A look at the numbers reveals that the nation is suffering from the worst period of job creation since the Great Depression. Most startling, we still haven’t recovered the jobs we lost during the recession.

That’s some strong rhetoric, but there are plenty of numbers to back up my assertions.

Let’s take a look at the interactive website maintained by the Minneapolis Federal Reserve Bank. This site allows users to compare all business cycles since World War II.

Let’s start by comparing the current business cycle to what happened under Reaganomics.

AFP Reagan v Obama GDP

As you can see, we’ve had a very sluggish recovery compared to the boom we enjoyed in the 1980s.

Not all of this is Obama’s fault, by the way. Here’s some more of what I wrote for the Chattanooga Times Free Press.

…all of these problems started before President Obama ever got to the White House. President Bush also was guilty of too much spending and excessive regulation, and his policies helped push the economy into a ditch. Unfortunately, even though he promised “change,” President Obama has been adding to Bush’s mistakes — and also raising taxes.

Some people may be wondering whether it’s fair to compare Reaganomics to Obamanomics. Maybe I’m cherry-picking data to make Obama (and Bush) look bad.

Pre-K Poll Vaulting

Just as President Obama has vowed to regain the initiative and push forward with his economic and education policy agenda, an organization called The First Five Years Fund has released a new poll asking the public about Pre-K policy. According to the poll, Americans know what they want (More federally funded Pre-K!), and know when they want it (NOW!).

Encouraging as this must be for supporters of a larger federal role in early education, opinion polling is not a good way to design policy—any more than it is a good way to design bridges. There is an aspect of bridge construction in which public opinion does properly figure: assessing demand. But when it comes to actually designing the structure that will carry living, breathing people across a gorge, public opinion plays little role. The reason is obvious: most people lack the time, skills, and knowledge to design bridges. They know what they ultimately want out of civil engineering projects, but they don’t know how best to achieve their goals.

It’s the same with education policy, and indeed with policy generally. Contrary to the apparent assumption of these early education advocates, it is not inherently obvious that increased federal Pre-K spending will ensure that children get a strong start in life. As it happens, there is a great deal of evidence that past and current federal Pre-K programs have proven expensive failures and have even, in some cases, done harm. Nor is the advocates’ currently favored policy–federally subsidized state Pre-K programs–an obviously good idea. Some states with universal Pre-K programs have actually seen their 4th grade test scores decline relative to the national average. There is no clear pattern of success.

Because of that fact, this is precisely not the sort of policy that should be expensively promoted at the federal level. If states wish to gamble that they can succeed where others have failed, then their residents should be the ones who put their money on the line. That approach has the merit that state politicians can be more easily held accountable than federal ones—voters have fewer issues on which to decide whom to support or oppose at the state level.

Well-meaning as the First Five Years Fund and its philanthropic backers no doubt are, their effort to design policy based on public opinion polling is badly misguided. It is little better than a schoolyard taunt that “everyone else wants to do it.” Serious people, people who actually want to achieve their stated goals and not simply win a political contest, can do better.

Moral of the Story: Tax Havens Are Okay if You’re a Politically Connnected Statist

Earlier this year, I had some fun when it was revealed that the president’s new Treasury Secretary had a lot of money in the Cayman Islands.

After all, leftists want us to believe tax havens are rogue regimes that should be eliminated. Some of them even want military intervention against these low-tax jurisdictions!

Much to my amusement, Mr. Lew even pretended he was financially illiterate to justify making sensible decisions to invest via the Cayman Islands.

And unlike the president’s first Treasury Secretary, Mr. Lew didn’t break the law and cheat on his tax return.

You probably won’t be surprised to learn that Secretary Lew wasn’t the first Democrat to utilize tax havens. Lawmakers such as John Kerry, Bill Clinton, John Edwards, and others on the left also have utilized tax havens to boost their own personal finances.

And it appears that Mr. Lew won’t be the last Democrat to be caught with his hands in the cookie jar.

Here’s some of what’s being reported by the New York Times in regard to the president’s nominee to be U.S. Trade Representative:

Michael Froman, a longtime White House economic aide nominated to be President Obama’s trade representative, has nearly half a million dollars in a fund based in the Cayman Islands, according to financial documents provided to the Senate Finance Committee. …White House officials said Mr. Froman played no role in creating, managing or operating the investment funds and had done nothing wrong. “Mike Froman has paid every penny of his taxes and reported all of the income, gains and losses from the investment on his tax returns,” Mr. Whithorne said.

I don’t remember that compliance with the tax law mattered when Obama and the media were going after Romney in 2012 for legally investing in the Cayman Islands.

Could it be that tax havens are okay, but only if you support big government?

It’s Obvious Student Aid Is Driven by Politics. But Not This Obvious

Federal aid for college students, it’s really no secret, is driven by what works politically, not what’s best for students. While logic and evidence strongly suggest that aid mainly enables colleges to raise their prices at breakneck speeds, politicians talk nonstop about aid making college “affordable.” Financial reality simply does not trump appearing to “care.” But on Friday, the Obama administration appears poised to take aid exploitation to a new level.

Tomorrow, the President will host what sounds like will be a textbook, campaign-style event featuring lots of no doubt somber – but oh-so-grateful-to-the-President – looking college students. With the photo-op thus set up, Mr. Obama will demand that Congress do something to stop the impending doubling of interest rates on subsidized federal loans from 3.4 percent to 6.8 percent.

But the GOP-led House has done something, and it is largely along the lines of what the President has called for. Last week, the House passed legislation that would peg student loan interest rates to 10-year Treasury bills, and would even cap rates at 8.5 percent or 10.5 percent, depending on the type of loan. It’s not exactly what the President wants – rates will vary over the life of the loan rather than being set at the origination rate, and the add-on to T-bill rates is higher – but the plans are still pretty close.

At this point, you’d think the President would be negotiating, not grandstanding. But then you wouldn’t understand federal student aid (or, really, almost anything government does). It is first and foremost about politicians – who are normal, self-interested people – getting what they need: political support, not sane college prices. And you get a lot of that support by appearing to want to “help people” more than the other guys.

If ever there will be a blatant, inescapable demonstration of what really drives federal aid policy, it will be the event we are likely to witness tomorrow. Let’s hope the public will get the right message: Politicians aren’t primarily driven by a desire to make college affordable. They’re driven by a desire for political gain. And that’s why we need them to get out of the student aid business.

Scandals Keep Eroding Our Faith in Benevolent Government

George Will, Michael Gerson, and our own Gene Healy are among the columnists who reminded us – in the wake of the IRS and AP snooping scandals – of President Obama’s stirring words just two days before the IRS story broke:

Unfortunately, you’ve grown up hearing voices that incessantly warn of government as nothing more than some separate, sinister entity. . . . They’ll warn that tyranny is always lurking just around the corner. You should reject these voices.

No road to serfdom here. Just us folks working together, to protect ourselves from sneaky reporters and organized taxpayers.

And now lots of people are noting that a series of scandals in government just might undermine people’s faith in government. John Dickerson of Slate writes:

The Obama administration is doing a far better job making the case for conservatism than Mitt Romney, Mitch McConnell, or John Boehner ever did. Showing is always better than telling, and when the government overreaches in so many ways it gives support to the conservative argument about the inherently rapacious nature of government….

Conservatives argue that the more government you have, the more opportunities you will have for it to grow out of control.

And Paul Begala, the Bill Clinton operative, notes:

This hurts the Obama Administration more than similar issues hurt the Bush administration because a central underpinning of the progressive philosophy is a belief in the efficacy of government. In the main almost all of the Obama agenda requires expanding folks’ faith in government, and these issues erode that faith.

“Faith in government” indeed. To paraphrase Oscar Wilde, putting your faith in government is, like a second marriage, a triumph of hope over experience.

But most particularly this week I’m reminded of Murray Rothbard’s comment in 1975 about what the era of Vietnam, Watergate, and stagflation had done to trust in government:

Twenty years ago, the historian Cecelia Kenyon, writing of the Anti-Federalist opponents of the adoption of the U.S. Constitution, chided them for being “men of little faith” – little faith, that is, in a strong central government. It is hard to think of anyone having such unexamined faith in government today.

Another 38 years later, it should be even more difficult to retain such faith.

Is This the Libertarian Moment?

In 2008 Nick Gillespie and Matt Welch hailed a “libertarian moment,” encompassing everything from the Internet to the collapse of “legacy” industries and legacy entitlement programs. I’ve used the same term here, when NPR talked about Ron Paul and when polls showed rising support for smaller government, gay marriage, and drug legalization.

But suddenly, today, everyone seems to see a libertarian moment. Driving in to work, I got so tired of the smug self-satisfaction on public radio’s pledge drive, I switched to the vigorously right-wing Chris Plante Show just in time to hear Plante say, “This is a great day for libertarianism” in regard to the abuse-of-power stories dominating the mainstream media.

And then, mirabile dictu, I got to the office, opened the Washington Post, and found today’s column by Michael Gerson. Now, as he says in today’s column, Gerson is “conspicuously not a libertarian.” Indeed, he is the most vociferously anti-libertarian columnist in contemporary punditry. And yet his column today is titled (in the print paper):

Making libertarians of us all

Man, you’ve got to abuse power something awful to make Michael Gerson start thinking libertarian. So thanks, IRS and Justice Department!

And now that the Obama administration’s abuse of power has got our attentioncan we broaden our focus to take in health care mandates, recess appointments, campus speech regulations, the anti-constitutional Independent Payment Advisory Board, similar extra-legislative bodies in Dodd-Frank, the expropriation of Chrysler creditors, and illegal wars?