Student Loans: Dems vs. GOP Made Easy

cross-posted from Dagblog

One thing that Barack Obama has done absolutely right for education is change the student loan program. Romney and Ryan have made it clear that if elected they will switch things back to the old way. This small policy difference demonstrates the larger difference between today's Democrats and Republicans.

Under the old system, college students took government-backed loans from private banks. When they graduated, they paid back the loan, with interest, to the bank. If they defaulted, the government, and you as a taxpayer, ate the loss and paid back the bank. This means 1) the bankers made all the profits and 2) the taxpayers took all the losses. It was obvious even to me, as an eighteen-year-old kid starting college back in the day, that this is a straight government handout to the bankers. It was like the bank bailout except it happened every day with smaller transactions.

When Obama got into office, this system was replaced with something resembling common sense. Now you take out student loans directly from the government if the government is backing them. This is only reasonable since the government is actually putting up the money. The people who risked their money on the loan (in this case the taxpayer) also get the interest. Last time I checked this was called "capitalism." Risk your capital, collect the return. (There are also still private student loans of course, issued directly from the banks and not backed by the government. That's as it should be; it's the bank's money at risk.) And once you cut out the middleman whose only job was to collect interest on someone else's money, the whole program became less of a budget hole. The new common-sense system, brings in interest from student loans, rather than simply losing money when they go bad. The old system was set up so it could only lose money. I think we call that a "subsidy."

To Romney and Ryan, of course, cutting out the middleman is unacceptable. If elected, they will make sure that bankers get to charge interest on someone else's money again. It's that simple.

Romney and Ryan say that the old, broken system was better because it involved "free enterprise." "Free enterprise" here means "bankers taking a fat cut of a government program for no special reason." The bankers have no skin in the game. All they do is make the system more expensive and inefficient. It's welfare for the wealthy. On the other hand, Republicans call Obama's direct government loan program, where you pay the people who actually lent you the money, "socialism." "Socialism" here means "not giving taxpayer money to bankers for free." We've gotten to the point where the Republicans even call sensible capitalism "socialism."

There are other questions about student-loan policies that are important, and student loans have become a touchy issue as students as public higher education has its funding stripped away and the difference is loaded onto the students' backs. But this difference between Romney and Obama is their whole approach to the economy in a nutshell. For the Republicans, government's role is to provide fat handouts to the rich, who feel naturally entitled to them. Then the recipients of those handouts can shout loudly about how they, the private businesspeople, create all the wealth themselves so why won't the government get off their backs? What they really mean is: "Hey, taxpayer, bend over so we can climb on your back."

Some things aren't complicated.

Labor Day Link: The Bread and Roses Strike, 100 Years Later

cross-posted from Dagblog

Labor Day is a great day to remember some of the history of the American labor movement. Of course, our leading American newspaper is using the day to lionize Henry Ford without mentioning how fiercely Ford hated the labor movement. So, a little counter-programming:

This year is the 100th anniversary of the Bread and Roses strike in Lawrence, Massachusetts (a place dear to my heart). The strike, and the mill-owners' violence against the strikers and the strikers' families, caught the whole nation's attention. We have spent the last century assiduously erasing these events from our national memory. But follow this link to read about what the good old days were really like, before labor unions ruined everything with their socialist 40-hour weeks, minimum wage rules, overtime pay, and child-labor laws. It's a good chance to read up on what the paradise of the unfettered free market was really like.

A hundred years ago today, the leaders of the Bread and Roses strike were awaiting trial for murder. They had been three miles away, speaking before hundreds of witnesses, when that murder took place. The victims were striking workers. The shots had most likely been fired by strike-breaking police. And you know what? That wasn't even the third-most-outrageous thing that happened.

I'd like to thank the Bread and Roses strikers for fighting to reduce the work-week to 54 hours. And that's just where the list of thanks we owe them begins.

Old Men Talking to Chairs Is Romney's Platform

cross-posted from Dagblog

I've been trying to lay off Clint Eastwood's surreal conversation with furniture, even as facebook friends urged me to blog about it. (King Lear also talks angrily to an empty stool, and my friends have suggested I blog about that.) But I do want to talk about what that incident reveals about Mitt Romney. It was the most revealing moment of the Republican convention. That Romney turned the mike over to Eastwood in prime time, with no script, tells us who Romney really is.

Letting rich, cranky old men do whatever they happen to feel like is Mitt Romney's main plan. It would be central to the conduct of his administration, because letting rich and powerful old men do what they feel like is a core value dear to Mitt Romney's heart. It's so important to him that he likely doesn't even realize it is one of his values. He just experiences that deferential indulgence to authority as an obviously and naturally good thing.

According to the New York Times, Romney himself had the idea to give Eastwood that plum speaking slot. Eastwood endorsed Romney at an exclusive fund-raiser. Romney bonded with him. What a great guy! Then an idea: give Mitt's new pal Clint a speech at the national convention! He'll be great! And so they did.

They didn't give Eastwood a speech, which is just barely defensible. They also didn't ask Eastwood to show them a speech beforehand, which is crazy. Clint's a rich old white VIP, which means in Romneyworld that he gets to do whatever he wants. Trust the man! Vision! Romney's vision of the world doesn't so much divide into the haves and have-nots as it does into the managers and the managed. Little people need to be managed, even micromanaged, and almost everyone is little. Big shots need to be allowed the freedom of their creativity, without any hint of question or doubt. (This is why actual creative artists never have anyone second-guess them or give them opinions: novelists have no editors, actors have no directors, and directors have no producers. Because, Creativity!) Eastwood is a big shot, ergo Eastwood was going to be great. You just gotta believe!

They did give Eastwood a time limit: five minutes. He took twelve. There was a red light that signaled Eastwood when his time was up, but he ignored it. (There are lights like that in comedy clubs; a comedian who has five minutes but takes twelve, or who runs the light by seven minutes, should not expect to perform at that club again.) Eastwood is too major a figure to be constrained by petty rules or common sense. He is entitled to do what he wants. And that is the vision that Eastwood and Mitt Romney share, on the most fundamental level: Clint Eastwood is entitled to do whatever the hell he wants.

Eastwood's speech was a microcosm of the whole Romney-Ryan campaign strategy, which (as Jamelle Bouie puts it) is to make up an imaginary Barack Obama to campaign against. (Gotta be easier than running against the real guy, right?)  But the decision to put Eastwood on stage, in prime time, with no instructions is a microcosm of Romney's approach to governing: let a handful of rich and powerful cronies, the kind of guys Mitt identifies and feels comfortable with, do whatever they want. The wealthiest and most powerful, especially the wealthiest and most powerful white men, the people with enough power to real some real damage, will be able to get Romney's ear and operate without any restriction whatsoever. They will be able to indulge their whims, and the President of the United States will help indulge them. It's untrammeled individualism for the 1% (to be fair, really for the top 0.2%), absolute liberty for VIPs. The rest of us can just stay out of their way.

Letting a famous actor go on stage with no script is just the beginning. A President Romney will let coal-mine owners do whatever the hell they want with their mines, without bothering with all that red tape about keeping the miners safe. He will let oil companies do whatever the hell they want with offshore drilling. Mitt trusts that they know their own business, and that's enough for him. He will let bankers do whatever the hell they want with complicated hedges and derivatives. They shouldn't be restricted by all these silly regulations. Those Wall Street bankers are all smart guys! What could go wrong?

Romney's deepest core value may be his reverence for the authority of rich and powerful men, especially older white men. He made a mistake just trusting an eighty-two-year-old millionaire to do whatever he felt like without supervision. But if he gets elected he's going to make that mistake over and over again, in a lot of different ways, as he trusts the Eastwoods of business and industry to do whatever they feel like without supervision.

I've been trying to avoid King Lear references for this whole post, but Shakespeare's play deals with Romney's error of judgment pretty directly. What should you do when a rich, powerful and accomplished octogenarian has a spectacularly bad idea and demands to have things exactly his way? Shakespeare's answer is the obvious one: try to stop him, for his own sake and everyone else's. Try to bring him in out of the rain. Tell him not to banish his favorite daughter, even if telling him makes him furious. (In fact, his irrational fury is another sign that you should stop him.) For God's sake, clean him up and put some clothes on him. Don't give him indulgence and deference when what he really needs are sensible limits. Romney's impulse is to let America's Lears do whatever they want, without second-guessing. ("Look, he's the King, and he's been king longer than we've been alive. You've got to let him run his kingdom the way he wants.") Everyone who watches King Lear can see the problem from scene 1. The tragedy of President Romney would be just as predictable.

Weekend Reading: Labor Day Edition

cross-posted from Dagblog

What better novel for Labor Day weekend than Joshua Ferris's brilliant debut, And Then We Came to the End? It's truly the Labor-Day read for our time. It's formally masterful in its first-person-plural narration, with a collective officeplace "we" who does the narrating, like this:

 “We thanked each other. It was customary after every exchange. Our thanks were never disingenuous or ironic. We said thanks for getting this done so quickly, thanks for putting in so much effort. We had a meeting and when a meeting was over, we said thank you to the meeting makers for having made the meeting. Very rarely did we say anything negative or derogatory about meetings. We all knew there was a good deal of pointlessness to nearly all the meetings and in fact one meeting out of every three or four was nearly perfectly without gain or purpose but many meetings revealed the one thing that was necessary and so we attended them and afterward we thanked each other.”

But perhaps more impressively it gets into the slowly dying heart of a certain kind of American workplace. If the book seems eerily in tune with our current atmosphere of economic anxiety and depression (and it certainly does to me) just remember that it was published in 2007, a year before the Smaller Depression began.

But not all work is done in offices with computers. In honor of working with one's hands, here's a prose poem by the great Kimberly Johnson: poet, Renaissance scholar and, as Steve Martin used to put it a perrsonaallll friendamine:

As crickets geiger-up for spring, we corral the ram lambs. They stutter and dense against the fence wheezing for the ewes. Down wince, down retch: up one and flip his back to mud, knee to sternum. The banded tail will black to wizen, prune off easy. But marking is all trespass: thumb the soft belly to pop the scrotum out, then lunge and turn the mind away, teeth working, working, to snap back and spit. I try not to taste but I am all mouth, all salt blood and lanolin. I hear their bleatings through my tongue. They call it marking for the tooth-scars on the belly, but when I speak tonight, my words will sputter and decay, and when try to say your name I will pronounce it elegy.

(As a bonus, following the link allows you to hear a recording of Kim reading this poem.)

Happy Labor Day, all!

What Did You Do in the Crisis, Mitt?

cross-posted from Dagblog

All that talk about how many years of tax returns Mitt Romney will release obscures the real question. It's not how many years he won't give us. It's which years.

What Romney doesn't want to give us, most of all, are his taxes from 2008 and 2009, the years of the crash and the bailout. Those returns tell us how Romney's personal fortune weathered those years, how much he might have lost, and how much he might have profited.

Had Romney been the Republican candidate in 2008, or been chosen as McCain's running mate, he would have been releasing his returns from at least 2006 and 2007, and likely more. (McCain would doubtless have insisted on more, and even the 2012 Romney is willing to release one or two returns.) Whatever clean-up his accountants and attorneys may have done before this year's run were presumably done before that year's run. If he was ready to release those returns four years ago, he has no reason to hide them now.

It's the ones between then and now that Romney wants to hide. It's not that he told his accountants to let it all hang out in 2009; Romney's been planning to run in 2012 since the day he realized he wouldn't win in 2008. But the 2008 crash changed a lot of plans. There's one theory that Romney lost so much in the 2008 crash that his accountants could "carry over" the losses and wipe out his 2009 tax bill. But it's also possible that Romney's business interests were helped, directly or indirectly, by government action to stop the crash. And those theories aren't even mutually exclusive: Romney could have lost tens of millions, excusing him from paying taxes, AND profited from taxpayer dollars to the tune of more millions. The bailout money stopped the bleeding for big investors, and kept them from larger losses; Romney could have lost a bundle (without missing it from his daily life) and also been saved from losing even more because the taxpayer bailed him out.

[What's the worst thing that could conceivably be in those returns? What would destroy the entire rationale for Mitt Romney's candidacy? TARP money.]

Either way, those tax returns tell a story about Mitt Romney and the financial crisis that's still hurting the rest of America. It didn't affect him the way it did us, because he lives in a different world. He did not go through that experience the way his fellow Americans did. He is not one of us. Whatever he says in his convention speech Thursday night, that's the truth.