Some Initial Thoughts On Biden’s Student Loan ‘Forgiveness’ Scheme

The day after President Biden announced his student loan "forgiveness" scheme, the Associated Press ran a piece highlighting criticism of the program. In Student loan crisis awaits new generation despite Biden plan, Collin Binckley reported:

For millions of Americans, President Joe Biden’s student loan cancellation offers a life-changing chance to escape the burden of debt. But for future generations of students, it doesn't fix the underlying reason for the crisis: the rising cost of college.

The specter of heavy debt will still loom over current high school seniors — and everyone after them — since the debt cancellation only applies to those who took out federal student loans before July 1.

Among the main causes is rising college tuition: Today's four-year universities charge an average of nearly $17,000 a year in tuition and mandatory fees, more than double the inflation-adjusted average from 30 years ago, according to federal data.

The rising cost of college is not the “underlying” reason. It is actually the effect. This doesn’t bode well for anyone looking for a solution. 

Anticipating criticism, Biden’s plan came with a separate proposal that aims to lower federal student debt payments in the future. The proposed regulation would create a new repayment plan with monthly payments capped at no more than 5% of a borrower’s discretionary income, down from 10% in similar existing plans.

It would also forgive any remaining balance after 10 years — down from 20 years in existing options — and it would raise the floor for repayments, meaning no one earning less than 225% of the federal poverty level would need to make monthly payments.

The underlying cause of the student loan crisis is the Federal student loan program itself. Since the federal student loan program ramped up, the cost of college over the past 45 years far outstripped inflation. Through various mechanisms, colleges were able to pump up tuition almost with abandon. This is exactly what you’d expect from an ever-growing flood of taxpayer money into an industry, which destroyed market restraints.

Not surprisingly, coming from a Democratic Party Administration, the "solution" turns out to be to expand borrowing by making it easier to make payments and ultimately easier to avoid paying it off. It’s a perpetual “forgiveness” scheme. 

Of course, actually fixing the problem is not the goal. Expanding government control of higher education and buying a whole new reliable block of Democrat voters is what it's really about. If they really were interested in a solution, they would end the student loan program, and all federal involvement in paying for college. But no “critic” quoted in the article even hinted at that as the only genuine practical and moral solution. It was more about how to rearrange the deck chairs on the Titanic.

Related Reading:

Forgiving Student Debt Without Abolishing the Federal Loan Program Is Morally Wrong by Robby Soave for Reason

Student Loans Should Be Repaid

On "Nightmare" College Debt

End, Don't Reduce, Federal Student Higher Education Funding

Rather Than quibble Over Federal Student Loan Interest Rates, the Feds Should Get Out of the Student Loan Business

Federal Student Loans and the GI Bill

Will Biden's Student Loan Debt Cancellation Plan Hold Up in Court? By Damon Root for Reason

FB Cancer Conspiracy Nonsense

Recently, an acquaintance shared article on Facebook, Cancer industry not looking for a cure; they’re too busy making money. It’s classic conspiracy theory nonsense. The points presented—no points are actually made—are so far-fetched that they’re not even worth commenting on. One example:

There is no real incentive to cure something that generates so much employment and profit; just imagine all of the cancer treatment specialists and their staff members who would be out of a job if this disease was ever cured.

As if cancer is some one single disease with one simplistic cure that eliminates all cancer from the entire human race! That’s the illusion created by Nixon’s “War on Cancer."

Of course, cancers do get cured. Some get managed to extend lives. Some cancers are not cured. Some don’t yet have effective treatments. But there is no one disease called “cancer.” It is many, many diseases that require many, many paths of research. But plenty of progress has been made against cancer, nonetheless. It’s a long and torturous progress; but progress nonetheless.

Anyway, I left this Facebook comment:

There's no such thing as a "cancer industry." There are companies that make money creating products that reduce suffering and extend life. That's what "making money" means--to make stuff people value and willingly pay for. Someone close to me was diagnosed with Crohn’s Disease at age 11. If not for the medicines created by profit-seeking pharmaceutical/biotech companies, this person wouldn't have grown into the thriving young adult he is today. There wouldn't be millions saved by organ transplants if not for the medical device and pharma industries. Cancer treatments have steadily advanced over my lifetime. I know plenty of cancer survivors among friends and family members. People and companies don't profit from cancer. They profit from extending lives. What a noble way to make money. This article would have us believe in some grand conspiracy involving tens of thousands of people, hundreds of companies, and who knows how many doctors. But that's all it is--dangerous conspiracy-theory quackery. It's sad to think of how many people might forgo valuable treatment because of this line of thinking.

These anti-science, anti-profit conspiracy theory peddlers are not just fringe nut cases. They do real damage by discouraging people from getting treatment that can help them. They consition people from getting not only cancer treatment, but vaccines as well. They are dangerous frauds.

Related Reading:

Promising trends and advances in the fight against cancer

Basic Cancer Research Funding: Don’t Forget Pharma

NJ Researchers Achieve Cancer Breakthrough

Gene Therapy Scientists Play God, Attack Cancer, Win by me for The Objective Standard

Heroic Scientists Achieve Major Advancement in Battle Against Cancer by me for The Objective Standard

Reason Delivers Again by Craig Biddle for The Objective Standard

NJ’s Unjust ‘Social Equity’ Legal Weed Regulations Not Unjust Enough for Some

My 8/17/22 post covered New Jersey’s regulations of the state’s emerging legal cannabis industry, which is based on reactionary, un-American “social equity” premises. The law favors individuals identified under so-called “disadvantaged” groups like racial minorities, those once incarcerated for marijuana usage, and women.  The industry is overseen by the Cannabis Regulatory Commission (CRC), which even has its own Diversity Director. 

Apparently, the bigotted structure of the law is not enough for some. On 8/15/22, the New Jersey Star-Ledger editorialized that N.J. promised help for small weed licensees. So start helping already. 

The first step toward getting a license to operate a cannabis business is approval by the CRC. But after that, the applicant must get a license from the municipality it wants to operate in, which can cost many thousands of dollars, reaching as high as $50,000 just to open. That’s bad enough. But apparently the unfair favoritism some receive from the CRC based on skin color or gender is still not enough.

Complains Linda Solana, “Charging me the same high amount as everybody defeats the purpose. They just don’t get what social equity really means.” 

But I do. This is how open bigotry has become. Unequal treatment before the law is now accepted in NJ. Yes, that’s what so-called “social equity” really means; not fair and impartial, the actual meaning of “equity”, but just the opposite; bigotry, cronyism, legal favoritism, racism, sexism. 

The fees are outrageous. No one should need permission from the state, the municipality, or any other governmental entity to start a business or earn a living. But compounding that injustice with “social equity” injustice just compounds the immorality of the regulatory assault on NJ’s weed entrepreneurs. What to do? Fire the CRC’s Diversity Director, outlaw the licensure requirement, outlaw the municipal shakedown fees, and return to America's fundamental Constitutional mandate that forbids any state to “deny to any person within its jurisdiction the equal protection of the laws.” 

Related Reading:

NJ’s Racist, Sexist, Un-American ‘Social Equity’ Cannabis Law

The Permission Society: How the Ruling Class Turns Our Freedoms into Privileges and What

We Can Do About It by Timothy Sandefur

The Growing Horror of Occupational Licensure

Licensure Epidemic

It’s Time to End Occupational Licensure for The Objective Standard

In Answer to a Reader about Licensure

Did the New York Times Just Vindicate Reaganomics?

The 1970s was racked by what came to be known as “stagflation”—the simultaneous existence of high inflation, repeated recessions, and low economic growth. Driven by high taxes, excess money creation to monetize massive federal spending, and massive government regulation, stagflation endured from the late 1960s to the early 1980s. It didn’t end until a major change in federal economic policy took hold. 

Inflation, properly understood, is an economy-wide scourge consisting of “too much money chasing too few goods.” A spike in the price of some particular good or service due to supply chain disruptions—such as the spike in gasoline prices in the months following Hurricane Katrina, which disrupted oil production in the Gulf—is not inflation. Inflation permeates every nook and cranny of the economy.

After years of stagflation, a new idea began to take hold in the late 1970s among many economists. And the idea led to a major new economic policy direction. 

That policy change came to be known as supply-side economics. That policy, embraced and implemented by the Reagan Administration, consisted of a three-pronged strategy; reigning in the money supply by the Federal Reserve, dramatic cuts in personal income tax rates, and widespread deregulation (deregulation actually began under the Carter Administration). Increasing the supply of goods by incentivizing production while cutting the money supply, the theory held, would bring supply and demand into balance, ending inflation while spurring economic growth.

The results were astounding. A massive job- and innovation-filled economic expansion took hold, with GDP growth of 8% growth out of the box, and 4% average GDP growth from 1983 through the end of the century. And that powerful expansion was accompanied by a phenomenon that was thought impossible by the prevailing 1970s logic of Phillips Curve economics: The strong expansion was accompanied simultaneously by falling inflation (12.5% to 3,4%), falling interest rates (19% to 8%), and falling unemployment (10.8% to 3.9%). 

Which brings us to today. For the first time since the 1970s, America is facing massive inflation. Will it degenerate into a long-term stagflation? Already, economic growth for the past 20 years has been half the 1980 - 2000 period, thanks largely to increasing regulation and government interference into the economy. Now that weak growth is joined by rampant inflation.

The political signs don’t look good. Unlike the late 1970s/early 1980s, which saw a major shift away from regulation and taxes, the current Washington policy features increased calls for regulation, especially through antitrust law and restrictions on energy production, and calls for increased taxes on producers. The Fed is attempting to reign in the money supply, but it seems to be well behind the inflation curve, now in the 8 - 10% range.

Furthermore, as the New York Times observed in The Painful Path, the government’s plan to fight inflation could cost jobs and restrict wage growth. Meaning, it’s back to the Phillips Curve, which holds that to lower inflation one must slow economic growth and raise unemployment. Have the lessons taught by supply-side economics already been lost. The times observes:

The country’s main tool for fighting price increases is Federal Reserve policy. The Fed is trying to bring inflation back under control by raising interest rates, which sets off an economy-cooling chain reaction. Higher interest rates increase the cost of mortgages and company borrowing, which slows business growth and translates into less hiring. As the job market weakens, paycheck growth slows, which further tamps down buying. Less shopping gives supply a chance to catch up.

So the Times acknowledges that the supply side of the equation has to “catch up.”  But how? The Times observes:

Fed policy works on the demand side of that equation. When fewer people shop for cars, because auto loans are expensive and the job market feels less secure, a smaller supply of vehicles might be enough to go around without causing prices to shoot up.

But crushing demand ranks somewhere between unpleasant and agonizing. When the Fed pushed interest rates to double-digit levels in the early 1980s, in an effort to bring down rapid inflation, it set off brutal back-to-back recessions that pushed the unemployment rate to nearly 11 percent. (Right now, the rate is at a historically low 3.6 percent.)

That grim historical example has prompted some labor-focused groups to call for a more holistic response to today’s price increases, which are the result of both strong demand and disrupted supply.

The White House and Congress could help to ramp up production in key parts of the economy, offering relief on the supply side of the inflation equation. [my emphasis]

And there-in lies the rub. The Biden Administration is to “help to ramp up production in key parts of the economy,” which to it means choosing cronyism, especially for its concept of “key parts” like unreliable renewable energy and electric vehicles and various “build-in-America” strategies. Whereas Reagan simply sought to get the government the hell out of the way and let productive innovative citizens rip, Biden wants to disincentivize production by selectively “helping” favored constituents. It calls for increased taxes on the most profitable corporations, while pursuing increased antitrust enforcement against the most successful businesses and an anti-merger fever that stifles innovation.

I like that the New York Times is mentioning the supply side. But the Times is calling for the supply side of the equation to be “helped” by more government, when what it really needs is less government and more freedom. As Reagan understood, and today’s leadership doesn’t, the driving force of economic growth is the individual’s pursuit of personal gain and happiness. Government policies that favor some and not others, or redistribute wealth from one pocket to deposit it in another, does not and can not cause growth. Only increasing incentives like reducing taxes (including inflationary government spending) and economic regulation can leave individuals freer to pursue more productive goals. The only way to “help” the supply side is to reduce government involvement. The direction we are currently heading is in the direction of a repeat of the 1960s and 1970s, when inflation came in wave after wave in an ever higher trend, rather than the 1980s and 1990s, when that pattern was broken amid powerful growth.  

Related Reading:

"Trickle-Down Economics": Anti-Capitalists' Insulting Portrayal of the "Common Man"

Jeb Bush’s Tax Plan, Hoover, and Reagan

On "Costly" Tax Cuts

Three Cheers for "Trickle-Down!"

Why a Government Can't "Stimulate" an Economy

Jimmy Carter Sparked a Craft Beer Explosion by Getting Government Out of the Way

NJ’s Racist, Sexist, Un-American ‘Social Equity’ Cannabis Law

From a New Jersey Star-Ledger report by Suzette Parmley, Minorities and women seeking to own N.J. legal weed stores `swimming uphill’ to land licenses:

The New Jersey cannabis law* was meant to give minority applicants from disadvantaged backgrounds . . . not just an even playing field to get into the cannabis industry, but a leg up.

Some say the statute that Gov. Phil Murphy signed a year and half ago touting “social equity” to create a diverse and inclusive cannabis industry and help reverse the damage of the nation’s failed War on Drugs isn’t living up to its promises.

[My emphasis]

But how do you “reverse the damage” of history by creating new victims of injustice out of innocent people—the people who are the “wrong” color or are not from the “right” background? 

New Jersey’s cannabis law has a “social equity” carveout option for members of historically “disadvantaged” groups, including minorities and women. This means that a person is to be judged by skin color, ethnicity, or gender. Where does that leave actual individuals? The 14th Amendment? Without any recognition. The law evades the fact that the smallest and only morally relevant minority on Earth is the individual. 

The Cannabis Regulatory Commission [CRC], the 16-month old state agency regulating the industry and overseeing licensing, lists “equity and safety” as its twin goals. On its website, the CRC says: “Social equity businesses, diversely owned businesses, and impact-zone businesses** will be prioritized in the licensure process so that their applications are reviewed before other applicants – regardless of when they apply.”

Of 102 conditional licenses awarded by the CRC in May and June, 37 were self-identified majority black-owned; 13 were self-identified as majority Hispanic or Latino owned; and roughly a third have owners who have past marijuana convictions. 

[My emphasis]

So an applicant who is waiting for his/her approval is continuously pushed to the back of the line whenever the latest “historically disadvantaged” group member files an application. Is this equitable?

The article highlights economic difficulties of aspiring small business applicants who face large competitors and municipal licensure and zoning restrictions**. Parmley profiles Colia Best, a “minority” applicant approved by CRC’s bigoted process:

“We can’t compete with all these big MSOs [multi-state operators],” said Best, 48, who claims he spends hours on the phone daily trying to line up investors, calling townships, and researching online for real estate. “It’s a waiting game. It’s like trickle down economics — we’re waiting to see what’s left for us.” 

Best has some nerve whining about “trickle down economics.” The CRC process prioritizes people like him based on group identity, leaving others “waiting to see what’s left for us.” It’s a “trickle up” process, privileging state-favored people like Colia Best.

This is what the innocent-sounding “social equity” ploy looks like in practice—unequal treatment before the law. That is the opposite of equity. To treat someone equitably means fair and impartial. There is nothing equitable about NJ’s cannabis law. A truly equitable law creates precisely what the NJ cannabis law explicitly does not—a legal even playing field. Instead, we get a legal leg up for a privileged few. 

What we’re witnessing in NJ and across the nation is neo-tribalism. Tribalism is an ancient evil that The Enlightenment, and America, left behind in the dustbin of history. The Enlightenment recognized, philosophically, the moral primacy of the individual. Individualism is the foundational principle that gave rise to institutions such as universal inalienable individual rights, rule of objective law, capitalism, and limited rights-protecting government. Yet the ghost of tribalism lives on in NJ law. NJ’s cannabis law is collectivist, racist, sexist, and thoroughly un-American. 

* [The law deals with state-issued licensure. It still leaves the licensee applicant needing to deal with local municipal licensure requirements.]

** [Government occupational licensure and zoning laws are another problem. They should be repealed or greatly scaled back. But that is a different issue.]

Related Reading:

The Racism of the ‘Anti-Racists’

Collectivist Left on 'Pay Equity for Women'

On New Jersey’s Proposed Bill to Study Racial Reparations

NJ Turns its Back on the 14th Amendment – and History

Woke Redistricting Madness in NJ

The Racism of the ‘Anti-Racists’: NJ Governor Murphy’s Strange and Discriminatory ‘Baby Bonds’ Scheme

The Diversity Delusion by Heather McDonald

Don’t Allow the Left to Own ‘Diversity’

Individualism vs. Collectivism: Our Future, Our Choice—Craig Biddle

Related Viewing:

VIDEO: Individualism vs Collectivism - Dr. Yaron Brook

SCOTUS Attacks Religious Freedom

Joe Kennedy, a coach at Bremerton High School, began praying on the field during school events. The Washington State public school district warned him several times to stop the public prayers because it feared that Kennedy’s actions violated the Constitution’s ban on government Establishment of Religion. 

Eventually, Kennedy lost his job, and sued the district. The case, Kennedy vs. Bremerton School District, ultimately went to the Supreme Court. In a clear violation of the Establishment Clause of the First Amendment, the SCOTUS ruled in favor of Kennedy.

The rationale for the SCOTUS ruling is that Kennedy’s actions are protected by freedom of speech. As Scott Shackford reports for Reason,

In a 6–3 decision, the Court determined that Joseph Kennedy, a former assistant coach at Bremerton High School in Washington state, was within his First Amendment rights and not acting in his capacity as a school official when he prayed on the 50-yard line at football games and permitted others (including students) to join him. As such, Kennedy was not causing the school to violate the Establishment Clause and endorse a particular religion.

The majority decision for Kennedy v. Bremerton School District, written by Justice Neil Gorsuch and joined by Chief Justice John Roberts and Justices Samuel Alito, Clarence Thomas, Amy Coney Barrett, and Brett Kavanaugh, leans heavily on evidence and statements that no student was coerced or ever said they felt coerced to participate in these postgame prayers. Gorsuch observes that it doesn't appear that the method that Kennedy engaged in prayer caused anybody to feel as though he were pushing his religion on students as a coach

But Justice Sonya Sotomayor easily demolishes this argument. As The MORNING DISPATCH reported on 7/6/22: 

In her dissent, Sotomayor argued that context—much of which was absent from Gorsuch’s majority opinion—was necessary to reach the correct conclusion in the case. “Properly understood, this case is not about the limits on an individual’s ability to engage in private prayer at work,” she wrote. “This case is about whether a school district is required to allow one of its employees to incorporate a public, communicative display of the employee’s personal religious beliefs into a school event, where that display is recognizable as part of a longstanding practice of the employee ministering religion to students as the public watched.”

Sotomayor’s dissent also focused on the power dynamics at play in the situation at hand. “Students face immense social pressure,” she wrote, even if they aren’t pushed to join prayers or punished for skipping them. “Students look up to their teachers and coaches as role models and seek their approval. Students also depend on this approval for tangible benefits … from extra playing time to a stronger letter of recommendation to additional support in college athletic recruiting.”

[My emphasis]

I would add that, among those tangible benefits is grades. It’s easy to see that a student may fear lower grades if she doesn’t go along with her teacher’s religious exercise. Regardless of whether there is any overt evidence in this particular case of a student being punished for not participating, the power that teachers have over students’ educational outcomes can easily foster covert forms of punishment, or fear thereof.

Here are my FB comments that accompanied my share of Supreme Court rules for coach whose prayers on field raised church-state questions.  Quoting from the article, I wrote:

"The 6-3 decision is a victory for those who seek a larger role for prayer and religion in public schools."

And it is a terrible defeat for freedom of conscience and religious liberty.

For the 2nd time in a week, the SCOTUS shredded the Constitution*, demonstrating once again the Conservatives' willingness to ignore the clear language of the Constitution when it suits their purposes.

Unlike the recent decision which affirmed the right of a Maine parent acting as a private citizen to choose a private religious school with her child's allotted education tax dollars, this incident involved a government employee acting in his official capacity at a government school function of a government school.

This is not a freedom of religion or freedom of speech issue, as the Conservative majority imagines. It is neither. The Conservative majority flippantly brushed aside the very first line of the First Amendment, which explicitly protects us FROM religion—"Congress shall make no law respecting an establishment of religion". This coach didn't privately pray. He made it a public demonstration, at a public school event, as a public school employee, thus implying the imprimatur of the state and carrying the power of a law sanctioning an establishment of religion.

There is no conflict among the first 3 phrases of the First Amendment—"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech . . ."—when you draw a bright line between government and private function. Of course, the root of the problem is government schooling. These conflicts would vanish if we amended the First Amendment to add "Congress shall make no law respecting an establishment of education, or prohibiting the free exercise thereof" and privatized all public schools—the complete Separation of Education and State.

* [The first time being the overturning of Roe v. Wade. Here is my Facebook post on the ruling.]

Related Reading: 

Separation of Church (or Education) and State

Why We Need the Separation of Education and State

Freedom Of Religion Demands Freedom From Religion

On Religion, The First Amendment Works Both Ways

Freedom Of Religion Demands Freedom From Religion

My Commentary on Church-State Separation

QUORA: ‘Why should capitalists be allowed to continually reap the benefits of others' labor?’

 QUORA: ‘Why should capitalists be allowed to continually reap the benefits of others' labor?’

I posted this answer:

The question implies that the capitalist—a label under which I include investors, businessmen, entrepreneurs—can profit only by permission, which the government should have the power to rescind, and thus outlaw and/or confiscate his profits at any time. 

The question ignores the fact that the employees accept and remain in the jobs created by the capitalist/businessman/entrepreneur by voluntary mutual consent, and that consumers willingly buy the businessman’s products. Therefore,  the profits are legitimately earned; meaning that the profits belong to the capitalist not by any authority’s permission but by moral right. It follows that there is only one moral way to “disallow” a capitalist’s profit—by consumers refusing to buy his product. Any other method, including governmental coercion, is criminal. 

That said, the creation of a product that is marketable at a price that is more than the total cost of production is not an easy task. It doesn’t just happen “somehow.” Yet the delusion persists that the labor of the individual workers, each performing a specific delimited task, magically integrates and coordinates into a final product. 

It does not. 

Capitalists reap the benefits of their own capital, ideas, managerial skills, production planning, market analysis, and the general work of running the enterprise and coordinating all of the myriad factors of production, including labor, when and if that work results in successfully creating a marketable product. The direct benefits labor contributes to the capitalist's goals goes to the workers in the form of wages, salaries, and fringe benefits. Certainly capitalists are not “reaping the benefits of others’ labor” if by “reaping” one means taking advantage of workers in the nature of Karl Marx’s absurd exploitation theory of capitalism. Capitalists benefit through their work as the Prime Movers of the business.

The benefits the capitalist receives results from his ability to plan and coordinate the productive contributions of different divisions of labor (and other factors of production) in a way that successfully culminates in the final marketable product, which the capitalist is solely responsible for making possible. It is the capitalist who gives value to the workers. A worker’s job has no value outside of the context as a contributor to the plans of the capitalist regarding the finished product. In this sense, it is actually labor that is reaping benefits—from the capitalists.

Related:

Jeff Bezos’s Beautiful Defense of American Entrepreneurialism

Good Answer  to this question by Saulius Muliolis

My answers to . . .

QUORA: ‘What are the practical proofs that the profits arise from labour which produces surplus value?'

Quora: ‘Is capitalism based on the exploitation of others?’

QUORA: 'How is becoming a billionaire even possible, chronologically?'

Related Reading:

Marx and His Exploitation Theory BY GEORGE REISMAN 

Atlas Shrugged—Ayn Rand

To Whom Does the American Worker Owe His Prowess?

Did Unions Create the Middle Class?

The Myth of the Entrepreneurial State by Deirdre McCloskey and Alberto Mingardi, especially Chapter 24, The Enchaining of Human Action Reverts to a Labor Theory of Value.

George Reisman on Ludwig von Mises, Ayn Rand, and Capitalism, interview with Jim Brown for The Objective Standard

On this Labor Day, Celebrate Intellectual Labor

The Moral Injustice of the Assault on the Space Billionaires

A NJ Letter-Writer’s Comic Book Economics

QUORA: 'How is becoming a billionaire even possible, chronologically?'

Capitalism by George Reisman

The Capitalist Manifesto by Andrew Bernstein  

What is Capitalism? by Ayn Rand 

[Compare: What is Socialism?--Robert Heilbroner, 1982]