Back to Basics

Is President Obama right about a looming student loan debt crisis?

It depends on how you define “crisis.” But there is a problem, and it is real.

What remains to be seen is whether or not the President – or anybody else, for that matter – is willing to face the real problem in higher education. Financing an education is not so much a problem, as is the stark reality that the cost of tuition consistently goes up, even when the price of other things declines.

It is a fact that over the last decade many “adjustable rate” student loans were issued, both by private lending institutions and government agencies. Just as they were intended to, the rates on those loans “adjust” upward. And on this point, the problem of student loan debt is similar to the mortgage crisis. Just as many Americans bought more home than they could afford, so also did many students “buy” more education than they could afford, or, at least, they bought their education under financial terms that eventually either have become or will become unmanageable.

But why is it that the price of college and university tuition generally only moves in one direction – upward? And why does the price of higher education rise, even when the prices of other goods and services in our economy decline? Most reports indicate that college tuition rates have continued to rise over the past four years. Yet during this same period, overall prices have mostly been flat or have dropped, even to the point where many economists have expressed fear about a looming deflationary cycle (the recent spike in global oil prices and the corresponding rise in other prices have been about the only exception to this rule).

The answer to this question is found in a very important fact. It is a consistent agenda item within institutions of higher learning to offer as many low cost, and even “free” tuition programs as possible. Whether you’re examining state run colleges and universities, or private institutions, look in to the details of school’s budgets and the agenda becomes clear. It is a point of pride if, year after year, when institutions can report that they issued more “scholarship” programs that are doled-out according to ‘financial need.”

A glaring admission of this came to light back in 2009, shortly after President Obama took office. In one of his first college commencement addresses that he would deliver as President, Mr. Obama traveled to Tempe, Arizona, home of Arizona State University. In a speech that discouraged what the President labeled the “selfishness” of business and for profit enterprise, Barack Obama admonished the students to instead deny themselves the pursuit of the “corner office” and pursue government employment, and charitable non-profit work.

These remarks from the President were not surprising, and were consistent with his disdain for private enterprise. What was a bit shocking, however, were the comments from the man to precede him at the podium, ASU President Dr. Michael Crowe.

Dr. Crowe began his speech of introduction with glowing remarks about President Obama. “No national leader before you,” Dr.

“Forward!”

It seems like a sufficiently innocent, positive word – doesn’t it?

It’s been a week since the Obama re-election team unveiled “Forward” as the President’s new campaign motto. And it’s been a week of commentators noting the similarity between Obama’s “Forward,” and liberal tv network MSNBC’s slogan “Lean Forward;” Communist Chinese Dictator Mao Zedong’s “The Great Leap Forward;” and “Spring Forward,” the slogan used by communist Russia Dictator Vladimir Lenin.

Some have insisted that the Obama campaign’s similarities to Chinese and European communism are only rhetorical, and, therefore, the choice of this word was simply an unfortunate mistake. Others suggest that this is a flagrant display of the true philosophical colors of our President, and those of the people by whom he’s surrounded.
But there have been multiple Obama Administration appointees who have spoken favorably and eloquently about communism. And President Obama has for years been promising to use government power to improve people’s lives – just like communist dictators do.

So is America comfortable with communists advising the President? And is Obama improving anything, as he gobbles up more control of our lives with executive mandates and big-government policies?

Since taking office in 2009, there have been at least three Obama Administration appointees who have expressed their fondness and appreciation for communism. Van Jones, President Obama’s former “Green Jobs Czar,” is perhaps the most widely known communist appointee who didn’t last long at the White House. After being appointed by the President in March of 2009, Jones became embroiled in “controversy” when it was discovered that he had previously identified himself as an “avowed communist,” and had ties to a Marxist group back in the 1990’s. After this came to light in the media, Jones was terminated by President Obama with less than four months on the job.

Then there was former Obama White House Communications Director (now a Democrat Party political strategist) Anita Dunn. Ms. Dunn, whose White House career dates back to the Carter Administration, was the subject of a brief moment of controversy in 2009 when it was discovered that in a speech she had noted that Mother Theresa and Mao Zedong were two of her “favorite political philosophers.”

As if that isn’t sufficiently accommodating to communism, President Obama’s former “Manufacturing Czar” had similar accolades to his name. During his tenure at the White House, Czar Ron Blum became famous for noting that “the free market is nonsense,” and that “Chairman Mao” had it right with idea that “political power comes largely from a gun…”
A communistic campaign slogan and three Administration appointees with affections for communism – accidental or not, there has nonetheless been a recurrent theme with the kinds of people with which our President surrounds himself. And then there are the policies and the promises, with the accompanying loss of individual liberty.

After less than two years at the White House, President Obama had successfully put in to place a system of tremendous governmental control over the otherwise private economy. By the middle of 2010, the President had become a de-facto C.E.O. over huge chunks of the economy, with the power to hire and fire executives, establish compensation limits for executive management, and to determine what products and services are produced.

“…Are you serious?”

Those are three simple words that form one simple question.  And the question has led us to this moment in time.

Recall in October of 2009, when then-Speaker of the U.S House of Representatives Nancy Pelosi was asked about the formulation of the Obamacare bill, and she asked that very question of a reporter.  “Madam Speaker,” a reporter from CNSNews.com said to her, “where specifically does the Constitution grant Congress the authority to enact an individual health insurance mandate?”

Ms. Pelosi seemed surprised.  Her indignant “are you serious?” response was followed with a slight bit of nervous laughter, as she then repeated herself. “Yes,” the reporter answered Ms. Pelosi, “yes I am.”

Pelosi’s Press Secretary Nadeam Elshami stated that the reporter’s inquiry was “not a serious question,” Pelosi shook her head in disbelief, and they both moved on to address another reporter, completely ignoring the question about “constitutionality.”

And after ignoring concerns about constitutionality for over three years, Democrats are now watching the Administration of their party Leader, Barack Obama, struggling to answer serious questions before the Justices of the U.S. Supreme Court. The left’s disregard for the limitations of government has been apparent for decades – President Obama himself was on record years before his election lamenting that the Constitution only stipulates what the government cannot do to you, instead of specifying what the government should do for you.

But now a moment of truth is staring all Americans in the face, as the Supreme Court will soon determine if the government can force you to buy something, along with determining whether or not the distinction between “citizen” and “non citizen” (as in Arizona’s illegal immigration law) matters any longer. As President Obama’s former Pastor Jeremiah Wright once famously said, “America’s chickens… are comin’ home to roost..”

The fact is that when Presidents and members of Congress dismiss the Constitution as Mr. Obama and his party have, the only thing standing between the individual citizen and the raw, brutal force of governmental power is the Supreme Court itself.  The American founders understood some things about the history of the world, as it existed leading up to our nation’s birth, and they recognized the natural human tendency of those in power to control and ultimately brutalize those beneath them.  This is why our Constitution stipulates that we are governed by three co-equal branches of government (not just one or two), and why those branches intentionally create a “check and balance” between each other.

So what if the Supreme Court says that Barack Obama is wrong?  What if the Justices collectively determine that our government cannot force the individual citizen to buy something, and that the distinction between being a citizen and an illegal immigrant is real? The Democrats would prefer a Supreme Court stacked with Obama appointees, who would then presumably approve of everything that Obama wants, but (thankfully) they haven’t achieved this yet.

If Democrats must campaign for the final months of this year’s election against a backdrop of Obama failures at the Supreme Court, we may see a well-financed P.R. assault against the Supreme Court Justices themselves.  History provides a lesson about this matter, because President Obama is not the first White House occupant to desire more power than the Constitution allows.

A question for the rich: if President Obama successfully breaks the backs of the working middle class, is that really good for you?

And how about this: if over half of your fellow Americans pay no income taxes and are quite happy to have you foot the bill for our wasteful bloated government, will that be good for your portfolios– or anybody else’s?

We’re less than seven months away from selecting either four more years of Barack Obama, or a new President named Mitt. At this point President Obama isn’t running on his track record, so much as he is running against his own characterizations of Congress and his Republican presidential opponent. But is that the stuff that leadership is made of?

The President portrays the Congress as though it is inept and obstructionist. Despite his own party’s control of the entire U.S. Senate, “Congress” is preventing further progress, Mr. Obama tells us, and it is threatening the hope and change that he has already created.

As for Mitt Romney– well, he’s a creature of wealth and privilege, according to President Obama, a man defined by his greed. Ivy League law school grad’s Barack and Michelle understand the struggle of the middle class, but Mitt and Ann are incapable.

But look who’s funding the President’s campaign – overwhelmingly it’s the richest among us. According to a New York Times report last year, Obama’s top donors included many Silicon Valley executives, hedge fund managers, entertainment executives, and former supporters of Hillary Clinton’s presidential campaign.

Today the President’s campaign is aggressively seeking low-dollar donors, soliciting contributions as little as $3.00 and raffling “dinner with the President” opportunities. Yet his financial support among middle and lower income Americans is miniscule, while wealthy Americans who are willing to pay up to $40,000.00 for dinner and a photo continue to flock to his side. Yes, there’s been a slowdown in the big-dollar donations, as the headlines indicate, but Barack Obama is still the presidential candidate of choice for rich folks.

And why? Are wealthy Americans so easily charmed by the thrill of “hanging” with a U.S. President that they’re ambivalent to the agenda they’re funding? And what part of the Obama agenda do rich people believe is strengthening our country – or even their own personal fortunes?

Consider the recent unemployment data. Thus far this year the U.S. Department of Labor has issued 14 reports on unemployment benefits claims, and 14 times the Department of Labor has revised the number upward, after the initial report was released. The Obama Administration grabs headlines with what appears to be a decrease in government benefits, then after the fact reports that the dependency is increasing. Is this what attracts the rich folks?

And how about the sharp decline in the number of people who are actually trying to work? The labor pool is shrinking (not just the number of available jobs) and the President’s solution to the problem is clear: more “free” services for the lower and middle class, and higher taxes for the rich. But is this our pathway to prosperity?

Dogma – a prescribed doctrine proclaimed as unquestionably true by a particular group; a belief system that remains largely unchallenged.

Sometimes dictionary definitions can seem vague or esoteric. But as it pertains to understanding President Obama and his devotees, it’s best to try and understand them through the lenses of left-wing dogma.

And the Anne Romney has “never worked a day in her life” flap is just the latest example of left-wing dogma colliding with mainstream America. Granted the strategic insulting of Mrs. Romney last week originated from Hillary Rosen, a liberal Democrat pundit, and not President Obama himself (although Ms. Rosen claims that she’s received numerous calls from the White House echoing support for her efforts to malign Mitt Romney’s wife). Yet it in the week prior, President Obama noted at a White House forum on women that in the early days of his marriage and career, he and his wife Michelle didn’t “have the luxury for her not to work.”

To those of us in “fly over country,” it may seem far-fetched to believe that two graduates of elite private east coast universities and an Ivy League law school, and who are stalwarts in what they call the “pro choice” political agenda, were left struggling without any economic choices when they started a family. But this is to view matters in overly literal, concrete terms. On the left side of the aisle, dogma comes first; reality is secondary, and one’s perception of reality is always shaped by that dogma.

Thus, the attitude reflected by President Obama and Hillary Rosen is illustrative of at least a couple of those “prescribed doctrines” understood to be “unquestionably true.” For one, women never freely choose to not be on a career track. Male oppression keeps women out of the marketplace, and, therefore, women who are only mothers are actually victims, and are in need of government programs (think affirmative action, “anti-discrimination” laws, etc..) to correct the injustices done to them.

If you live outside the confines of this dogma as I do, you may be thinking “but wait! Some women actually choose motherhood before career, and some husbands make tremendous sacrifices to allow that stay-at-home mom thing to happen.” But this leads us to another item of “unquestionably true” dogma: any woman who was truly being “herself” would never freely choose motherhood above all else.

On the contrary, a woman who thinks this way is being held hostage to ancient, patriarchal, male-dominated ideas – we’ll call it “ideological victimization” that probably happened within the context of an unenlightened religious setting – and she is need of a swift rebuke, if not more government intervention. Left-wing dogma always tells us that mere motherhood is not really working. That may be painful for some women, but such confrontation is really for a woman’s own good, and certainly adds to the “collective good” of the dogmatic community.

Are you beginning to understand how left-wing dogma works? Here’s another example of it: one should always assume the worst about the U.S. military, except when it is being commanded by a Democrat President and when it is participating in a multilateral mission (U.S. troops deployed side-by-side with troops from other countries).

Quick – can you guess who I’m describing here?

He campaigned against financial mismanagement, and the “harsh realities” of global capitalism. He pledged during his campaign to end corruption in both the government and the private sector.

After being elected President, he claimed that he had “inherited” the worst economic situation in recent history and then went about consolidating his power. Once privately-owned enterprises were “restructured” into government owned entities, some even organized into workers’ cooperatives.

Unemployment remained painfully high, even as the much-celebrated “reform” measures were being implemented. As private sector workers suffered with worsening economic conditions, government employees enjoyed the comforts of steady work and benefits while the President and other policy makers sought increasing control over the nation’s privately-owned wealth.

Does this seem like a description of the Obama Presidency?  Certainly this depicts, at least in part, what we’ve experienced in the U.S. since the earliest days of Barack Obama’s first presidential campaign.

But – believe it or not – this is actually a description of the ascendency of Hugo Chavez in Venezuela. In fact, you could call this a “textbook case.”  I’ve paraphrased a bit for the sake of column space, but this description of Chavez appears in “International Business: Competing In The Global Marketplace,” a text book currently used among M.B.A. students at many of America’s top graduate business schools.

Chavez became the democratically elected President of Venezuela in 1998, a decade before Barack Obama was elected to be our President. And the reason Chavez has been able to morph in to a dictator – he has successfully seized control over privately owned banks, tv stations, farms and gold holdings, to name a few items – and the reason he is still in power today, is because the first thing he did after taking office in 1999 was to substantively change his country’s constitution and re-arrange the nation’s judiciary.

The fact that one man could so quickly seize control of the entire country of Venezuela, probably speaks to some relative weaknesses in that nation’s constitution.  And the fact that no U.S. President – not even Barack Obama – has seized this type of control over America, speaks to the relative strengths of both our U.S. Constitution itself, and the separation of powers among our three branches of government that are stipulated by our Constitution.

With so much of our individual liberty resting on the foundation of the U.S. Constitution – and yet with most of human history having been littered with not-so-benevolent dictators like Chavez – we should both expect that powerful leaders will want to overreach in to our lives, and be vigilant to call fowl when they do. Unfortunately, it seems that most Americans are shocked by President Barack Obama’s contemptuous remarks about the Supreme Court last week, as the court review his signature “healthcare reform” law.  Worse still, it seems that very few Americans recognize the President’s behavior is problematic.

“Today, members of Congress have a simple choice to make..”

President Obama was speaking in the White House Rose Garden this past Thursday. Our nation’s energy problems –problems that, as he stated last month, have plagued our country for over thirty years – could now be addressed with one simple juxtaposition and one obvious choice for those who serve in the House and Senate.

“They can stand with big oil, or they can stand with the American people” our President claimed, as he went on to explain his plan to end what he calls “tax breaks” for oil companies. “Right now, the biggest oil companies are raking in record profits,” he continued, “profits that go up every time folks pull up into a gas station…”

President Obama’s remarks about oil companies amount to nothing new – neither in terms of rhetoric, nor in terms of ideas – and they are easy to ignore. Yet they are worthy of our attention, because our President is responding to a crisis with campaign rhetoric that he used years ago, and with ideas that even congressional Democrats have determined to be untenable. Equally as problematic is the fact that the President’s claims get repeated over and over throughout much of the American media, without any fact-checking, contextualizing, or questioning.

So let’s start by questioning President Obama’s logic. He characterized his proposed solution to rising gasoline prices as a “simple choice to make” on March 29th. Yet, on February 23rd of this year, the President belittled the calls from Republican presidential candidates to expand oil exploration and development here in the United States. “That’s not a plan, especially since we’re already drilling” the President told an audience in Miami, Florida on that day. “It’s not a strategy to solve our energy challenge, “ he claimed, as he continued with his disparaging remarks, “…there are no quick fixes.”

So on February 2rd there were “no quick fixes,” yet on March 29th Congress had “a simple choice to make.” Expanding the use of American oil resources is bad, but raising taxes is good. This is apparently the underlying premise of the Obama Administration’s “energy policy.”

Our President’s rhetoric about the oil industry over the past few weeks is essentially a repeat of several of his past performances. During the 2008 oil price spike, in August of that year, then-Senator Obama stood in front of a stadium full of fans in Detroit and said many of the same vilifying things:

“…First, of all..” Mr. Obama began, “You’ve got oil companies making record profits…no… no companies in history have made the kind of profits the oil companies are makin’ right now…They..they…….one company, Exxon Mobil, made eleven billion dollars…billion, with a “b” ….last quarter….they made eleven billion dollars the quarter before that…makin’ money hand-over-fist…makin’ out like bandits…”

The spite and indignation over profitable American companies got the election year crowd fired-up. Yet candidate Obama’s proposed “solution” to the dilemma in August of 2008 was the same then, as it is now: raise taxes on oil companies. His rhetoric fails both in terms of basic economics, and in terms of sound energy policy. But this, apparently, is what President Obama knows, and he will not be deterred.

You’ve probably seen the headlines – the J.O.B.S. bill passed in the Senate.

So that means more “jobs” in the American economy, right?

As President Obama and a large portion of the Congress run for re-election, Washington is obsessed with this rather illusory concept of “job creation.”  And the “J.O.B.S.” Act, named with an acronym that stands for “Jumpstart Our Business Startups,” is the latest legislative effort to stimulate business startups, and thus, to entice job creation.

The bill actually resembles a hodgepodge of several different legislative agendas.  And even if the bill accomplishes what its supporters claim, it is probably still several steps removed from actual “job creation.”  It may also be yet another governmental wet blanket thrown on top of an economy that is ready to catch fire.

But before I get in to these latest details, let’s consider what Washington has been doing to “create jobs” over the past few years.

In February of 2009, the federal economic “stimulus” bill became law.  It cost us over $850 billion, and it was promised that, as long as the bill passed, the national unemployment rate would not rise above 8%.

Well, the unemployment rate rose well above 8% after the bill’s passage, and it still has still not dropped below that mark.  One can argue that the bill was necessary at the time – or not – to prevent further erosion in the economy.  But there would seem to be fewer “jobs” in the American economy, in the aftermath of this big Washington spending binge.

Then in 2010, there was the monumental healthcare reform bill.  This bill was sold as a means of curtailing healthcare costs, making healthcare “universal,” and, as the President noted, it would prevent the government itself from “going bankrupt.”

It was also sold as a job creation bill.  Former Speaker of the House Nancy Pelosi claimed right before the bill’s passage that  it would create 4 million jobs – “400,000 jobs almost immediately.” Since it became law 2 years ago, healthcare costs have skyrocketed, private sector employers have dropped health coverage for some 1-2 million workers, and 400,000 new jobs have yet to be created.

My point here is that our federal government has spent untold amounts of our scarce tax dollars in the name of “creating jobs,” with little or nothing to show for it.  Given this, we should all approach the new “J.O.B.S. bill” with a healthy dose of skepticism.  Politicians have a built-in incentive to appear as though they’re doing things that make our lives wonderful.  But just because they claim to be doing great things,  doesn’t mean that they are.

As for the new “J.O.B.S. bill,” a version in the Senate passed, but now it goes to the House of Representatives for amending, and a vote.

One of the claims about this bill is that it would expand a phenomenon known as “crowd funding.”  As writer Catherine Clifford noted at Entrepreneur.com, the bill seeks to make it “easier for startups to raise small amounts of money from large pools of investors” by utilizing this burgeoning mechanism for funding.

But this great effort on behalf of the U.S. Senate raises an important question:  does the process of crowd funding need help from the government?

Sensibility – the capacity for sensation or feeling; keen consciousness or awareness.

Sometimes dictionary definitions can seem vague or esoteric. So let me suggest that the word “sensibility” might also be described as one’s “gut instincts” about their experiences.

And it may also be the case that President Obama’s recent decline in the polls is not merely because unemployment is high, or because the cost of living is rising higher. It may be that some of President Obama’s own recently stated positions are violating the “gut instincts” that many Americans have about their own country.

Let’s start with the insurance industry mandates for abortion coverage, and the alleged “war on women.” When President Obama mandated in February that medical insurance companies provide coverage for abortion, sterilization and contraception, reaction was swift and visceral. Many religious organizations – most notably the Catholic Church – responded very negatively, and characterized the decision as a threat to religious freedom.

As presidential politics go, Mr. Obama’s mandate probably achieved its intended short-term goal: it successfully re-directed the national conversation away from issues surrounding the economy, the national debt, and a faltering foreign policy, and toward a discussion of abortion and religion. But the ways in which the conversation has devolved since its initial re-direction may not be playing to the President’s favor, and may now be contradicting Americans’ sensibilities about personal responsibility.

Most Americans do not share President Obama’s enthusiasm for abortion. But, fortunately, a majority of Americans still do not share the President’s support for economic entitlements either, nor are most of us as excited about government control over private businesses as he seems to be.

Yet the abortion enthusiasts who have run to the President’s defense in the last several weeks – most notably Georgetown University student Sandra Fluke, who we now know has a direct connection to former Obama Advisor Anita Dunn – have pushed a message of support for both abortion, and entitlements. “If somebody else doesn’t pay for my abortion and birth control,” Ms. Fluke is essentially telling us, then she is being “denied access” to healthcare – and this amounts to a “war on women.”

Americans are tiring of the “somebody else should pay for my stuff” attitude. In fact, there is a growing perception that the Obama entitlement culture is damaging our economy and our future, and the reality that President Obama would intertwine abortion and economic redistribution contradicts our gut instincts about how America should operate.

Another problem for the President may be his recent handling of the military. In the aftermath of the horrific news that a U.S. Marine allegedly massacred several civilians in Afghanistan, the American people have been treated to a barrage of conflicting information. The Marine had a “brain injury;” the Marine was “suffering from Post Traumatic Stress Disorder;” he may have been “drunk,” and he was angry about another deployment. We’ve seen all these explanations emerge, with no clear comments from the President or his Administration.

Yet what we have seen and heard from the Administration has been worse than mere message mismanagement. The President and his Administration have exhibited a sense that they neither enthusiastically appreciate the men and women in uniform, nor do they trust them.

“We Can’t Wait!”

Barack Obama often seems annoyed by the limitations of his office these days, especially with a Congress that occasionally disagrees with him.

So rather than let something silly like the co-equal branches of government get in the way, the President has chosen instead to harness the mantra “We Can’t Wait!” (do an online search with the mantra and his name), and then impose his controls over our economy by executive mandates.

With an unending supply of programs to stimulate everything from domestic tourism to farm production, President Obama has huge chunks of the American economy firmly within his grasp. 4 years ago this kind of government control seemed like a good idea to some, but who still thinks that way now?

I remember back in the fall of 2008 when I attended an Obama campaign “meet up” at a bar. It was in Phoenix, Arizona – the home of Mr. Obama’s opponent at that time, John McCain, and home to a brutal real estate crash – and a mortgage lender friend told me “you gotta come meet these people. They’re young, hip, smart, lots of MBA’s and lawyers, and they’re all supporting Obama.”

What I observed as I mingled with the young, hip, smart people was that they liked to talk about how young and hip and smart they believed Barack Obama to be. They’re confidence in this one man was unending, while specific details about economic and public policy concerns weren’t discussed much.

“Why did so many banks and borrowers agree to ARM loans in the first place?” I asked one of the hipsters, trying to engage a discussion about how bad government policy can incentivize bad consumer behavior. “Obama will implement a program to stop the foreclosures” was all the answer I could get.

“Why do healthcare insurers continue to raise their rates?” I asked another hipster, hoping we could talk about the ways in which government policy prevents competition among insurance companies. “Obama has a plan to expand coverage and reduce premiums” I was told. End of discussion.

That was in 2008. Now, after nearly three and a half years of President Obama’s all-seeing and all-knowing wisdom forcing private companies and individuals to do what he wants them to do, we should pause and ask ourselves: does more government control over our economy produce more prosperity for us all?”

The President and his supporters like to pretend that anything short of Obama’s controls over the economy is tantamount to no government regulation at all. “We can’t go back” the President has said, suggesting that before he became our ruler, banks and insurance companies and oil corporations were completely unregulated.

This, of course, is false. Our economy is heavily regulated, and while some regulations are necessary and helpful, others are not. Federal law, for example, forbids health insurance providers from competing with each other across state lines; it forbids oil corporations from developing petroleum energy throughout much of the U.S.; and federal banking policy – much of which emanated from Fannie Mae and Freddie Mac – incentivized reckless borrowing and lending during the last decade.