The Mendacity of Power: President Obama’s Pitch to Students
Sometimes small things suddenly provide insight into a big issue, making clear what we had perhaps only sensed before.
Such an event occurred for me when I was listening to sound bites fromPresident Obama’s speech to college students several weeks ago at the universities of North Carolina, Iowa and Colorado. There he was, the most powerful man in the world, open collar, no coat, appealing to a group that is vital to his hopes for re-election. Was he speaking of the ideals of theDeclaration of Independence, that all men are created equal, and of our unalienable rights to life, liberty and the pursuit of happiness? Was he appealing to the better side of those cheering students, encouraging them to embrace the Progressive mantra of creating a more just society?
Absolutely not! He was appealing to their narrow self-interest, their greed, if you will, by promising he would fight to keep the interest rates on student loans from doubling to 6.8% from 3.4%! There he was, offering to buy the students’ votes with a government subsidy, and the students, feeling empowered to feed off of their fellow citizens, offering to support him in turn with at least their cheers if not their votes.
It was so small, so demeaning of the Office of the President, of the man who spoke the words, and the audience who cheered him on.
What makes it worse is the lack of substance to the President’s pitch. When the Democrats took control of Congress in 2006, they voted to gradually reduce the rate on new Stafford loans, which are available to any student regardless of need, by 50%. The 3.4% rate took effect last August on all new loans. But because of the cost – an estimated $6 billion a year – the law called for a restoration of the 6.8% rate on new – not existing — loans in the 2012-13 school year.
Even the Washington Post Editorial Board opposes keeping the current, 3.4% interest rate:
One of those issues is the failure of federal loans, grants, tax credits and the like to actually make college more affordable. As it turns out, those citadels of the progressive milieu, colleges and universities, don’t walk their talk, but bend to the laws of supply and demand in the pursuit of their own self-interest.
According to the College Board, tuition at public and private four year colleges has gone up in constant, 2011 dollars faster than the growth in federal subsidies. Between 2006-7 and the school year now ending, public four-year colleges raised “published tuitions” (in 2011 dollars) by $1,800, or 27%, to $8,240 per year. The College Board calculates that after all of the subsidies are taken into account, “net tuition” for a student that qualifies for the maximum federal aid still went up $170, or 7%, to $2,490. Room and board, too, increased faster than inflation. As a result, in just the last five years, the total net cost of room, board, tuition and fees at four-year public colleges increased $1,250 (2011 dollars), or 12%, and this year totaled $11,380. Unsubsidized costs rose 20% to $17,130.
Obama acknowledged as much, saying: “It’s not enough just to increase student aid. We’ve also got to stop subsidizing skyrocketing tuition.”
But that’s just more talk. There is no evidence that he would go down the counter-productive path of imposing direct or indirect price controls on college tuitions, and in doing so, risk undercutting his support among college administrators and faculty.
The sad truth: Progressives have failed again to keep their promise of using the power of government to produce a more just society. Instead, the student loan program has made things worse, not better for its intended beneficiaries, especially those most in need.
Many of those students will find themselves locked into a life of penury. Unlike all other debts, federal law prohibits college loans from being discharged in bankruptcy except in the case of “undue hardship.” Thus, politically correct indentured servitude is preferred to politically incorrect free markets where lenders are able to make judgments about an individual’s reliability and character before choosing to make a loan and risking the consequences of a default.
It didn’t have to be this way. An alternative to the federal loan program,United Student Aid Funds, was founded in the early 1960s by Richard C. Cornuelle. With funds solely from the private sector, USA Funds provided loan guarantees to banks to make it possible for college students who could not otherwise qualify for a loan to borrow money at a bank in their neighborhood with no collateral other than a promising academic record. By 1963, two-thirds of the nation’s banks were making low-cost loans to needy students whose college would simply stipulate he or she was likely to finish their course of study.
However, as Cornuelle explains in his classic book Reclaiming the American Dream, which advocated a vibrant “Independent Sector” to compete with the welfare state, the Johnson administration, perhaps sensing the danger of such a success, passed an education bill that vastly expanded the federal government student loan guarantee program. Ultimately, the federal government extended eligibility for guaranteed loans to the broad American middle class, successfully displacing the independent sector solution.
Which brings me back to the scene of the President of the United States in a campaign like swing to three universities to offer a phony benefit in exchange for the college kids’ cheers and votes. There he was, the man who embodies more than any other the Progressive desire to fundamentally transform America, revealing the ugly truth of his political philosophy. Stuttering through his lines, he was stepping to the beat of the power motive, trapped in a dance of corruption and deceit. Though he speaks of compassion, he acts through manipulation; though he speaks of fairness, he acts by appealing to greed.
I was left with the vision of a brutish society, where special interest groups gather under the Progressive banner of social justice to plunder one another; ruled by a governing elite who gain and maintain their power by appealing to the savage within each of us who would feed off the fruits of someone else’s labor. A small thing, the sound bites of the President of the United States speaking to college students; an important insight into the danger of the Progressive ideology to our dignity, our liberty, and our freedom to pursue happiness as we see fit.