Monday, November 23, 2020

Toilet-paper college degrees paid for with toilet-paper money: DOE's expert says taxpayers on hook for $400 million in student loans

 Our old friend, the U.S. Department of Education, released an internal report showing that the U.S. government will probably lose more than $400 billion in unpaid student loans.  

As Josh Mitchell pointed out in a Wall Street Journal article, this amount approaches the amount of money private lenders lost during the 2008 home-mortgage fiasco.  Unlike 2008, however, the student-loan crisis will probably not trigger a financial meltdown.  The feds can simply borrow billions of new dollars to absorb the loss. The taxpayers won't even notice.

But I think the student-loan debacle is even worse than DOE's internal report admits.  Nine million people are in long-term, income-based repayment plans (IBRPs), and almost all of them are not making monthly loan payments that are large enough to cover accruing interest on their underlying loans.  DOE's report estimates that IBRP borrowers will only pay off about half the amount of their loan balances, but the loss must be larger than that if the vast majority of people in these plans aren't paying down their loans.

Millions of people are taking out student loans to finance their college degrees--betting that their education will land them a good job. Too often, they lose the bet.

Meanwhile, people who skip college for a vocational school or an apprenticeship in the trades are making more money than college grads and aren't mired in student-loan debt. As Zero Hedge Fund put it, "there are plenty of hard working plumbers earning six-figures, who didn't take on a mountain of debt for a toilet-paper degree."

As conservative economists keep warning us, the Unites States will soon experience a spike in inflation unless the government stops printing money and running deficit budgets. When that occurs, students will have the grim satisfaction of paying off the loans for their toilet paper degrees with toilet-paper money. 

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Thursday, November 19, 2020

Joe Biden wants Congress to give all student borrowers $10,000 in debt relief: Too little? Too much?

 This week, Joe Biden called on Congress to give all student borrowers $10,000 in debt relief on their federal student loans.  "It should be done immediately," Biden said.

Senators Elizabeth Warren and Charles Schumer say Mr. Biden's plan is not bold enough. They want him to use his executive powers to give all student borrowers $50,000 in debt relief.  Senator Schumer said that relief of that magnitude would wipe out all federal student-loan debt for 75 percent of college borrowers and provide at least partial relief for 95 percent. 

So--is Biden's proposal too little or too much?

As I have said for years, a flawed relief plan is better than no relief plan. I support any congressional or presidential action that would grant some relief to the nation's 45 million student-loan debtors, who collectively owe $1.7 trillion in college loans. If $10,000 in debt relief is the only arrow in Mr. Biden's quiver, I say he should let it fly.

But both the Biden plan and the Warren-Schumer proposal are flawed. First of all, a $10,000 write-off of each individual's student debt will do almost nothing for the nearly 9 million borrowers in income-based repayment plans. Their debt grows larger by the day because the loan payments aren't large enough to pay off the accruing interest.

Moreover, Mr. Biden wants Congress to approve the deal, which will take weeks, if not months.  After all, the student-loan catastrophe is a political hot potato that Congress might not want to pick up.  

The Warren-Schumer proposal is far more comprehensive than Biden's. As Senator Schumer said, this would eliminate all (federal) student-loan debt for most Americans. But Warren and Schumer want Biden to take this action on his own hook.  Does he have the authority to forgiveness $50,000 in student loans for millions of debtors?  

Who knows?  Ultimately, a federal court would have to rule on that question.

As Senator Schumer averred, a $50,000 Christmas present would relieve most recent college graduates of all their federal student-loan obligations. For those folks, their college degree would turn out to be free--or almost free. That would make many young Americans very happy, and most of those who bothered to vote cast their ballots for Joe Biden.

But there are moral hazards to the Warren-Biden scheme that are not inconsequential.  I think it is a mistake to allow college graduates to walk away from their student loans while doing nothing to force the universities to bring their costs down. 

Giving a few million Americans a get-out-of-jail-free card on their student loans will only encourage the universities to continue charging too much for a college degree and perhaps even tempt them to raise prices further. What do tuition costs matter if the government is going to step in from time to time and give students a free ride on their loans? 

And once the feds step in once with a $50,000 bailout, students will get it into their heads that they will do it again. So why worry about those student loans? How will kids pay the rent on their luxury student housing?

No. It would be much better for Congress to pass legislation--with the next President's support--that would give distressed debtors easier access to the bankruptcy courts. Let the bankruptcy judges sort out who is really broke and deserves debt relief.

Regardless of what Congress or the next president does, the student-loan scandal will not be fixed overnight.  It is the huge friggin' elephant in the room that has blighted millions of Americans' lives.

But I think it would be a mistake for our national leaders to wipe out perhaps a trillion dollars of student debt and leave the taxpayers stuck with the bill. 

Americans have grown skeptical about the value of a college experience at universities mired in sexual-assault scandals (Penn State, UCLA, Baylor, Michigan State, LSU, etc.). They wonder why our elite schools harbor so many blowhard professors who teach students nothing more than most of them are victims of societal bigotry.

Ain't there at least some good things about American society--its culture, literature, democratic values, respect for human rights--some American virtues worth studying and nurturing?

If not--if America is in the toilet and worthy of nothing but contempt, why must students spend four or five years in college and borrow $50,000 or $60,000 to get a bachelor's degree in cynicism? Didn't they learn to be cynics in high school?

Wednesday, November 18, 2020

The deer that refused to die: An old duffer finally shoots a buck

 In Louisiana, people generally take up deer hunting when they are quite young--about 12 years old.  Both boys and girls hunt deer, and by the time they are in their mid-20s, they know what they are doing in the woods. 

I am 72 and only took up deer hunting last year, so I am about 60 years behind the learning curve. Nevertheless, with the help of some brilliant tutors, I finally shot a young buck last week.

But it wasn't pretty.

Saturday afternoon, I was sitting in a blind, and a deer came out into a clearing about 50 yards from me.  As my companions might say, it was shootable, but it was small, and more experienced hunters would have passed it up.  

But I had been deer hunting seven or eight times without getting a deer, so I gave it my best shot with a borrowed .270 rifle.

The deer went down like a sack of potatoes.  Success at last!

But then I forgot the advice my friends had given me time and time again.  If you shoot a deer, don't leave the deer stand. Keep your eye on it and chamber a second bullet.

Did I do that? No, I did not. I knew my companions would want to hear from me right away because they would have heard my rifle fire. So I sent them a text message telling them I had been successful.

Then I looked up, and that deer was gone! 

Five hunters converged on the site, and we looked high and low for that deer or at least a blood trail that would confirm that I had hit it.  Darkness fell, and we continued looking with flashlights. I plunged into the underbrush, hoping to find it crumpled under a pine tree, but I saw neither hide nor hair of that animal.

Sunday morning, I settled into a different blind, and another deer appeared.  This one was a young buck. 

I aimed for its front shoulder and fired, and this deer also dropped like a sack of potatoes. 

But this time, I remembered my friends' instructions.      I stayed in my deer stand, I chambered a second bullet, and I DIDN'T TAKE MY EYES OFF OF IT.

And guess what? The little rascal got up, looking as healthy as the day he was born.

So I fired again.  This time the deer went down like two sacks of potatoes.

I sat in my blind and waited for more than half an hour.  Later, when I examined it with my friend Emil, we could see that it was dead. Not merely dead but really and sincerely dead.

So--I thought--this deer must have two bullet holes in him.  After all, I had shot it twice.

But I could only find one bullet hole, which was about 8 inches to the right of where I aimed.

What the hell? Did I miss it the first time? If so, why did it fall like a sack of potatoes? Had I scared him? Was he messing with me? 

Perhaps this deer's friend--the one I had shot at on Saturday--told him that if a particular elderly hunter fired at him, he should play possum until the hunter started texting on his cell phone.  He could then sneak off and meet his pals for drinks at the Port au Prince Restaurant.

I don't have an answer.  My friends assure me there are two bullet holes in that deer that are so close together that they are hard to distinguish.  But I am skeptical.

After all, no one ever compared me to Annie Oakley.

"I knew Annie Oakley, and you sir, are no Annie Oakley."

Tuesday, November 17, 2020

I'm in 12-step plan to swear off American politics: I vow never to watch or read any more political news--ever!

 I've known a few alcoholics over the course of my life, and several told me they were saved from destruction by Alcoholics Anonymous.  

I'm not an alcoholic, but I admit that I became addicted to politics during the recent presidential campaign.  I watched television news obsessively, and I worried about our country's future no matter who won the presidential election. My friends are divided politically, but almost everyone I know has been distressed by recent political events. I found we couldn't talk to each other about our concerns for fear of losing a friendship.

And then on Wednesday morning--the day after the election, I realized that I don't care who gets sworn into the office of the presidency in January.   I don't care who is appointed to cabinet positions, and I don't care who controls Congress.

Like a recovering alcoholic, I realized that I was powerless over the national political scene and that America--like the life of an alcoholic--has become unmanageable. Like a recovering alcoholic, I came to believe that only a Power greater than the American people can restore us to sanity.  

As an elderly white guy who lives in Louisiana, I now realize that our national politicians don't give a damn about the people who live in Flyover Country. 

They don't give a damn about the jobs that have been lost in the Midwest--the jobs that went to China.

They don't give a damn about the opioid epidemic that has swept through rural America.  

They don't give a damn about the strip mining destroying the heartland or the wind turbines that have turned the high plains into a vast junkyard. 

They don't give a damn about the spike in mortality rates among working-class Americans--rates fueled by drug overdoses and suicide.

They don't give a damn about the fact that American universities have become criminal rackets run by academic gangsters.

They don't give a damn about a global economy that is destroying the American middle class.

And you know what? I don't give a damn about the global elites who have turned our country into a moral cesspool.

So--I'm not going to read the friggin' New York Times, the friggin' New Yorker, or the friggin' Washington Post. I'm not going to watch the friggin' cable news shows or the friggin' Hollywood movies. I'm not going to read the friggin' op-ed essays in my local newspaper. 

Instead, I'm going to cultivate a garden, learn to hunt deer, and watch international movies on Amazon and Netflix like Far From Men, The Load, and Black '47. I'm going to root for the New Orleans Saints and read the sports page. I'm going to try to be a better husband, brother, and grandfather. I'm going to learn to smoke a better brisket. 

And I will continue trying to ease the burden of our nation's 45 million student-loan debtors, which is the only professional interest I still care about.

And I will continue to pray for the canonization of Dorothy Day, the greatest American Catholic of the twentieth century.  If we all aspired to live like Dorothy, our nation would be healed. I urge you to read her book, Loaves, and Fishes, and you will see that I am right.

I have been on this new path for only about ten days, and so far, it feels pretty good.  Not great, but pretty good.

Servant of God Dorothy Day

Monday, November 16, 2020

Dead man walking: The small liberal arts colleges are in a death spiral

 Experts say that the Americans most at risk of dying from the coronavirus are elderly people with serious underlying health problems such as diabetes, obesity, and hypertension.

Something similar might be said about America's colleges. The schools most at risk of closing due to the COVID pandemic are small, private liberal-arts colleges that had severe financial problems even before the coronavirus forced most of them to close their campuses last spring. These are the little schools that were struggling with budget deficits and declining enrollments.

Common Application, an organization that processes a standard application form primarily for liberal arts schools, confirms this view.  So far this year, Common App received 8 percent fewer enrollment applications from first-year students than at the same time last year (as reported by Inside Higher Ed).

But some colleges suffered steeper declines than others. Colleges and universities in the Northeast and the Midwest, where the small liberal arts colleges are concentrated, suffered a 14 percent drop in applications. 

And small colleges lost more ground than big ones. First-year college applications were down the most among schools with fewer than one thousand students.  They also are seeing a 14 percent decline.

If next year's entering class drops by a corresponding rate, then a small college of 1000 students will enroll only 860 students, which would be an existential catastrophe.

But enrollments probably won't drop that much. Why? Because many colleges are lowering their standards to attract less qualified students---students who might have been rejected a few years ago.

Presently, a majority of colleges and universities do not require applicants to submit ACT or SAT scores.  They say they took this measure to offer more enrollment opportunities to first-generation and minority students.  

But I think they are lying. I think the colleges are abandoning standardized test scores to attract students who don't do well on those tests. By doing away with the ACT and SAT, the colleges can obscure that they are scraping the bottom of the academic barrel to get enough tuition-paying students to pay the light bill. 

Also, by giving applicants the option of not submitting a standardized test score, only people with good scores will provide them.  And this will cause the colleges' average test scores to go up--making them look better in the US News and World Report rankings.

In a way, American colleges in the age of  COVID are like the German Wehrmacht during World War II.  When the war began, Germany had plenty of healthy, young Aryan soldiers with blue eyes and blond hair--men who just couldn't wait to get their legs blown off in the service of the Thousand Year Reich.

But as the war wore on, millions of those ideal soldiers were killed in North Africa, the Western Front, or Russia.  The Soviets captured about three million Germans soldiers (mostly men but some women) and allowed them to starve to death.

By the time the Russians got to the suburbs of Berlin in 1945, most of those poster-perfect German soldiers were gone, and the Gestapo was rounding up young boys and old men to man the barricades.

Likewise, many small liberal arts colleges are willing to enroll just about anyone who can pay their tuition bill--whether or not the applicants are qualified under the admissions standards of yesteryear.  

Unfortunately, many of these unqualified students are taking out student loans that they will never pay off.  

In my view, many of these struggling little colleges should close their doors rather than stagger on for a few more years by signing up students who take out student loans for an educational experience that will do them very little good. 

Hey little guy, how would you like to get a bachelor's degree in gender studies?

"I've always depended on the kindness of strangers": An Athabaskan woman and six Mexicans saved me from freezing to death in Alaska's Copper River Basin

 "I've always depended on the kindness of strangers," Blanche DeBois said in Streetcar Named Desire. I know what Blanche was talking about. Several times in my life, I was saved from catastrophe by someone I did not know.

Many years ago, when I was a young Alaska lawyer, I was driving a rental car through the Copper River Basin on my way to a school board meeting in the little town of Glenallen. It was winter, and the temperature on the Richardson Highway was 20 below zero.

I wasn't speeding, but I was driving too fast for the road conditions. I hit a patch of black ice and rolled my car into a snowbank. I wasn't hurt, but I was dangling from my shoulder harness. I released the seatbelt and climbed out through the passenger side window.

It was about three in the afternoon, and dusk was falling. I had my so-called survival gear in the car's backseat  (parka, Sorel arctic-pack boots, heavy wool pants). I began putting it on as a heavy snowfall began, almost immediately obscuring my rolled car, which was white.

Before I got my cold-weather gear on, I realized I would not survive the night. The temperature would drop to 40 below, and no one was likely to travel Richardson Highway at this late hour.  My cold-weather gear was utterly inadequate for what lay ahead.

As my terror began to rise,  I saw a car creeping down the highway at about 20 miles an hour. An Athabaskan woman was driving, and she gave me a lift. I still remember the feel of her car's warm cabin with hot air blowing toward me through the air vents.

Improbably, the Athabaskan lady was traveling to visit her boyfriend, who was working on a seismic crew somewhere out in this frozen waste. Before long, we found him. He was Mexican (also improbable), one of a crew of six guys who spoke Spanish. 

The boyfriend and his comrades had some sort of enormous industrial vehicle.  I couldn't make it out in the darkness, but I recall it was so large that I had to climb a ladder to get into the cab.  We drove down Richardson Highway until we found my car.

Our little group pondered the car's situation. It was lying on its side with all four wheels exposed. 

"Anybody hurt?" the leader asked.

"No," I replied.

"Thanks be to God," he said and made the sign of the cross.

After diagnosing the situation, the Mexicans attached a chain to the car's underbody and pulled it out with their behemoth machine.  Then they pushed it over until it was upright on the road.  They cleared the snow out of the engine compartment and told me to try to start the engine.

I turned the ignition key, and the car started. All of a sudden, my near-death experience became an amusing personal anecdote. I told them I would buy them a case of beer, but one of my rescuers demured.  "No, no," he said. "Jack Daniel." 

I was not Catholic at the time, and I found the Mexican's sign of the cross to be charmingly childlike. I did not realize that the Athabaskan woman and the Mexican seismic crew were angels dispatched by St. Joseph to save my life.

But why did St. Joseph bother with me? I still don't have a clue.

Richardson Highway in winter

Friday, November 13, 2020

Guilford College, a liberal arts school, cuts some liberal arts programs: Does that make sense?

 After 12 years of declining enrollments and a massive budget deficit, Guilford College is taking drastic action. President Carol Moore proposes laying off 15 tenured faculty members and cutting undergraduate programs in chemistry, physics, political science, philosophy, economics, history, mathetics, sociology, and anthropology. 

In an unsigned statement, Guildford announced that it would maintain 23 programs, including African and African American Studies: Women's, Gender and Sexuality Studies, and Exercise and Sport Sciences.

Naturally, Guildford's statement did not list the programs it was cutting. I had to find that out by reading a story in the Christian Science Monitor.

Was this a good idea?

Not in the view of some faculty members. Thom Espinosa, chairman of Guildford's Physics Department, had this to say. "This plan does not reflect on the school's philosophy in any way," Espinosa told a reporter.

Historically, Gulford has maintained a peaceful balance among science, arts, humanities, and social sciences, as is appropriate for both a Quaker school and a liberal arts institution. If this plan represents any philosophy or vision, it must be [President Carol Moore's].

 I am in total sympathy with Professor Espinosa, but President Moore had to make some difficult decisions. It is not tenable for a small college to lose enrollment over a long period of time and operate on unbalanced budgets.

In a way, Guilford College is in the same position as the German army when it invaded Russia in 1941. The Germans captured 3 million Soviet soldiers before the Russians rallied and cleaned the Germans' clock.  But the Wehrmacht had no ability to care for all the enemy troops who surrendered and basically allowed most of its prisoners to die from starvation, disease, and exposure in open fields surrounded by barbed wire.

The German army's position was that someone has got to eat, and it will be us.

I don't mean that as harshly as it may sound, but it is now clear that hundreds and perhaps thousands of tenured professors are going to lose their jobs at struggling liberal arts colleges.  I think that is inevitable.

In my view, colleges in financial trouble should spend at least some of their dwindling resources to help laid-off professors find other jobs or at least provide them with decent compensation as part of their termination packages.