OLYMPIA — State government stores money at Bank of America, buys goods with U.S. Bank cards and distributes welfare aid through JP Morgan Chase ATMs.

Supporters of cutting such ties to big banks say the first step is to create a state-owned bank.

The idea of a state bank — a favorite of the Occupy movement that sees it as an alternative to Wall Street — has strong support among the Democrats who control the state House. Speaker Frank Chopp called it a top priority last week in a speech opening this year’s session of the Legislature.

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“3 Reasons We Shouldn’t Bail Out Student Loan Borrowers” is written and narrated by Nick Gillespie and produced by Meredith Bragg.

About 3.33 minutes long. Go to Reason.tv for downloadable versions and subscribe to Reason’s YouTube channel to receive automatic notifications when new material goes live.

As the cumulative total of student loan borrowing approaches $1 trillion dollars, calls to forgive some or all of that debt are mounting. Federally guaranteed student loans make up more than half that total and Barack Obama is pushing to cap the amount any borrower must pay back in a given year and forgive outstanding balances after 20 years.

Among Occupy Wall Street protesters, calls to bail out student loan holders are arguably the single-most voiced demand and sites such as Forgive Student Loan debt beat the drum for immediate and widespread relief.

But forgiving student loan debt is a very bad idea for at least three reasons.

1. These loans are voluntary. All borrowers are excrutiatingly well-informed of how much they’re borrowing and how much they’re going to have to pay back.

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Glenn Reynolds in today’s New York Post:

It’s officially a crisis. Student loan debt has hit the $1 trillion mark, exceeding Americans’ total credit card indebtedness. Unemployed graduates with huge loan balances are camping out in “Occupy” camps — the Hoovervilles of our age — around the nation. And President Obama, perhaps afraid those camps will be dubbed “Obamavilles,” as indeed they have already been by some, has unveiled a new proposal that promises to help graduates who are drowning in debt.

Unfortunately, “promises” is the correct word. Though unveiled with much fanfare, the Obama proposal doesn’t really do much. First, as the Chronicle of Higher Education pointed out in an article characterizing it as mostly political, “The benefit is available only to current students. Those jobless college graduates who are protesting on Wall Street and at similar events elsewhere won’t qualify.”

Second, even for those who do qualify, the benefit doesn’t amount to much. Daniel Indiviglio of The Atlantic Monthly calculated that the president’s plan will save the average grad less than $10 a month. (Even those with $100K in debt will save only $28.50 a month). You can make that sound like more — and the White House tried — by touting total savings over the life of the loan, but this isn’t going to rescue anyone who’s financially underwater. It’s a beer and a slice a month, more or less.

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Push youngest/oldest to the front lines….This is a battle over images, not just over the park.

- Charles Lenchner, Occupy Wall Street activist, Oct. 13, 2011

If the police overreact (as they are likely to) and we take the blows, and it is recorded, it will go worldwide and further tremendously galvanize the movement.

- Tarak Kauff, Veterans for Peace organizer, Oct. 13, 2011

Woman in a wheelchair, Occupy Oakland riot, Oct. 25. Photo: Bradblog.com

When the activists of Occupy Oakland attacked police en masse on October 25th, throwing paint bombs and provoking volleys of tear gas, the images galvanized the Occupy movement as never before.

“Come see the violence inherent in the system!” they have all but shouted, using wild allegations of police brutality, and fallacious arguments about First Amendment violations, to build solidarity among scattered activists.

The outrage is sincere–but so is the jubilation.

Clashes with the police affirm the activistsʼ fantasy–that they are the leading a revolution, that the truths they speak are so potent that the “1 percent” must use force to suppress them.

The clashes also assuage the jealousy–what Harvard literature professor Philip Fisher once called “nightmare envy”– western radicals feel when watching the Arab Spring, where the struggles are deadly real.

But the Occupy activists have not just yearned for confrontations with police; they have planned them. (more…)

I really hate mice, but even I felt for the freakishly disgusting rodents when I was walking around Target and saw mouse traps with FAKE cheese on ‘em. Are mice so freaking stupid they’d actually fall for something pretending to hold the most coveted of cuisines within a mouse’s palette?

There’s a political parallel there…

Monday, President Obama announced a plan to force banks to refinance home mortgages for those who are upside-down in their property. For those of us who bought high and now couldn’t dream of selling at a profit, this is a wonderful way for us to benefit from a government that seems to spend on programs that’ll impact us, right?

But then we take a few steps closer and realize if we fall for this, we’re being sucked into something we already kinda fell for a few years back.

The original mortgage plan, put into effect in 2009, was designed to allow those who are current with their payments but have little or no equity in their home to secure lower mortgage rates. The President’s Home Affordable Refinance Program has helped only 894,000 borrowers since the spring of 2009. The administration had originally hoped up to 5 million homeowners would benefit. I guess this didn’t work as planned. This revised plan is supposedly going to help up to 1.6M homeowners and will force banks, on paper, to take a loss on the mortgages of people who over-extended themselves.

What the President is really feeding us is nothing more than a petrified piece of cheese that’s sat out in the sun way too long and has now been spray-painted and re-molded so as to broaden its appeal (so he hopes) in order to garner votes from an electorate who would otherwise NOT vote for him. (more…)

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss earnings season, Google and Microsoft bidding for Yahoo, and the $1 trillion in student loans that me be the next bubble to burst.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Microsoft and Google consider bid for Yahoo
Spenders Become Savers, Hurting Recovery
From Spenders to Spendthrifts
$1 trillion in student loan debt sparks furor
Obama’s efforts to aid homeowners, boost housing market fall far short of goals

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Just because the #OccupyWallSt crowd is drowning in student loans and unable to find jobs in Obama’s economy doesn’t mean they’ve given up on higher education completely. If one worthless degree in gender or culture studies doesn’t cut it in today’s competitive marketplace, why not add two or three more? Well, the #OccupyWallSt crowd is ON TOP OF IT!

On Wednesday they decided that what they really needed was an Anarchist College. (We’re not kidding.) And, they took to the web to solicit instructors (sorry, facilitators):

Liberty Plaza Anarchist College Seeks Teacher/Facilitators

Posted on October 5, 2011 by thehumanchannel

The main goals and values of this college is to teach how important establishing the values of any group is, and that a society or environment of non-dominance and non-hierarchy is the one in which its members thrive. Anarchy literally means without a ruler, so an individual who oppresses any other individual by limiting their autonomy including if it is a member of the establishment’s protection service, (i.e. police) who is not directly involved in oppression, would not be an anarchist since they would be dominating the other without warrant. Unprovoked oppression not for defense of ones own autonomy is not anarchy.

Please refer teachers and materials to OWSEducation@gmail.com. A short intro to the class you’d like to teach will help pair you with other facilitators.

Subjects needed

Consensus Process, facilitator neutrality and values

Horticulture/Permaculture

green anarchy etc

anarchy

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Florida Attorney General Pam Bondi is joining her Kentucky colleague Jack Conway in waging a war on for-profit colleges – with taxpayer funds – while turning a blind eye to problems in non-profit and state schools.  Except, in Bondi’s case, there are demonstrable instances of mismanagement, fraud, and abuse in those taxpayer-funded colleges that she appears to be ignoring for the time being.

A few examples of taxpayer waste that Bondi should be focusing on:

• State-funded Daytona State College, Florida A&M University, Edison State College, and Miami-Dade College all currently face losing their accreditation due to issues ranging from low performance standards to admitting students without required courses to employing too few professors.

• Florida’s biggest state universities are under fire for rampant abuses within their athletic programs.  Numerous Florida State University athletic teams have been forced to vacate wins due to academic misconduct, while University of Miami athletes have been discovered accepting illegal gifts and money.  The University of Central Florida is also under investigation for recruiting misconduct.

• The Florida state college corruption extends all the way up to state elected officials; former Florida House Speaker Ray Sansom came under fire for securing funding for a building at Northwest Florida State College that was in fact an airport hangar for political donors’ private jets.

Sounds like enough material for some high-profile state investigations, right?  Actually, Attorney General Bondi is focusing her government investigation on a handful of small, for-profit schools.  The charges against the schools largely revolve around allegedly false claims used by recruiters leading to enrollment of students who were under-qualified and/or unable to repay their loans upon completion.

Could it be that Bondi and others, including federal regulators, are attacking for-profit colleges chiefly because they have taken a piece of the higher education pie in recent years that was traditionally serviced by state-run community colleges and vocational schools?  The fervor with which state officials in Florida, Kentucky, Texas, and other states are going after for-profit schools suggests motivation beyond the desire to prevent a few gullible students from falling for glitzy ad campaigns.

At the federal level, the Department of Education’s proposed ‘Gainful Employment’ rule would create new narrow metrics to define “gainful employment” based on student debt-to-income levels and loan repayment rates.

What the DOE’s formulaic approach is missing is that these institutions serve student communities with significant risk factors such as low incomes, full-time employment, and delayed enrollment which adversely impact degree attainment and account for their having a higher loan default rate than less inclusive institutions.  Even with these challenges, the fact remains that for-profit colleges have a better record of graduating low-income and minority populations than public institutions and private, not-for-profit schools, at a substantially lower total government and taxpayer cost.

Over the last month, Barack Obama has toured a number of community colleges and job training facilities promoting what he believes is the next great job-creation and employment strategy: training young people graduating from high school and adult workers who have been laid off from their initial careers in the skilled trades. Experts estimate that nearly half a million skilled trade jobs remain unfilled because Americans simply lack the expertise necessary to fill these positions, and Obama is aiming to close the widening employment gap and give some semblance of normalcy to an increasingly irritated public by pushing programs that will get Americans back to work: training people to use the shovels for the shovel-ready jobs, if you will.

Of course, there’s a major flaw in his plan. While Obama is out promoting community colleges and job training programs, his administration is actively killing one of the most successful job training operations. Just last month, Obama’s Department of Education passed what is now called the “Gainful Employment rule,” a rule that severely limits the amount of federal financial aid students may receive to attend for-profit and career colleges – the very colleges that are training low-income, disadvantaged, minority and non-traditional students to enter or re-enter a dramatically changing workforce.

Obama’s Department of Education and it’s supporters in Congress claim that career and for-profit colleges have problems: that their students have a low graduation rate, a low employment rate following graduation and have a difficult time repaying loans. These concerns, they say, led to the need to limit the financial contribution taxpayers make to their education and opportunity. It’s understandable, except that the agenda really isn’t saving taxpayers money. The agenda is, instead, creating a preferential environment for incubators of the next Democratic generation: non-profit schools. If the agenda were saving taxpayer dollars, they might be targeting the very programs Obama is asking Americans to further contribute their support to.

Now, obviously, the educational elite are not fans of for-profit education.

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A firestorm now rages in Texas over transparency and accountability in higher education. Governor Rick Perry and the Texas Public Policy Foundation have encouraged regents to peek inside the ivory towers, and the universities are responding. History argues that we must peek.

Perry wrote on May 13 that “efforts to protect taxpayers and get more results from our schools are not universally welcomed in academia. The attitude of some in the university world is that students and taxpayers should send more and more money, and then just butt out.” He adds, “Four-year graduation rates at Texas institutions of higher education currently average just 28.6 percent.”

Asserts the governor: “The big lie making the rounds in Texas is that elected or appointed officials want to undermine or deemphasize research at our colleges and universities. That disinformation campaign is nothing more than an attempt to shut down an open discussion about ways to improve our state universities and make them more effective, accountable, affordable and transparent.” Such a goal nationwide at all universities would be laudable.

A barn burning study last month from Richard Vedder’s Center for College Affordability and Productivity revealed that of the more than 4,200 faculty members at the University of Texas at Austin, the 840 most productive faculty members teach an extraordinary 57 percent of student credit hours, while the least productive 840 members teach only 2 percent of student credit hours.

But this disparity is not the greatest abuse.

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From Glenn Reynolds’ latest column in today’s Washington Examiner:

Right now, people are still borrowing heavily to pay the steadily increasing tuitions levied by higher education. But that borrowing is based on the expectation that students will earn enough to pay off their loans with a portion of the extra income their educations generate. Once people doubt that, the bubble will burst.

So my advice to students faced with choosing colleges (and graduate schools, and law schools) this coming year is simple: Don’t go to colleges or schools that will require you to borrow a lot of money to attend. There’s a good chance you’ll find yourself deep in debt to no purpose. And maybe you should rethink college entirely.

Many people with college educations are already jumping the tracks to become skilled manual laborers: plumbers, electricians, and the like. And the Bureau of Labor Statistics predicts that seven of the ten fastest-growing jobs in the next decade will be based on on-the-job training rather than higher education. (And they’ll be hands-on jobs hard to outsource to foreigners). If this is right, a bursting of the bubble is growing likelier.

What about higher education folks? What should they (er, we?) do? Well, once again, what can’t go on forever, won’t.

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Question: What good is a pledge if it is not adhered to?

Answer: Not very good.

And that’s the state of Obama’s pledge to end the practice of allowing industry insiders involved in lobbying to affect public policy from within the government.

Like with so many other things in the Obama agenda, the audacity is the degree to which rules are broken and job-killing policies enacted.

Today’s case study is an individual by the name of Robert Shireman. He happens to be Deputy Undersecretary at the Department of Education.

Mr. Shireman’s role in the transition and at Education violated both Obama transition and administration ethics policies. Why?

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I don’t usually engage in snarky posts, but every once in a while, I need a little snark to put a ridiculous situation into perspective.  So please indulge me for the next three minutes…

It’s a good thing the government’s taken over the student loan industry.  Now our precious young college students will receive every opportunity to spend hours learning in the college classroom, enlightening their minds and enriching their lives.

Oh wait, no, that’s not how that “free money” is spent.  Why use our hard earned tax dollars for an education when you can waste our money and spend that time instead on becoming a pawn in someone else’s propaganda?  Why not abuse the money that’s been confiscated from our paychecks at a time when we so desperately need it and instead enjoy the benefits of union indoctrination on your college campus?

So let me get this straight.  Students all across the country have suddenly all taken a collective interest in the economic performance of their university’s cafeteria?  So, instead of attending classes like grateful students excited to learn, they’re sitting in the middle of a busy intersection at a red light, arm in arm, donning their SEIU-provided purple shirt, blocking traffic and taking cops away from important things – like responding to emergencies.  And last week, 20 were arrested for doing this at Ohio State University.

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“Education is a right!” That was the mantra of the “progressives” marching a few weeks ago against proposed tuition increases for college students.  Implicit in that chant is the thought that college should be free for everyone, after all you can’t charge for a “right.” While I’d love to retroactively wash my hands of my student loan payments, this “belief” doesn’t hold up to scrutiny because it exposes the blatant hypocrisy of those chanting it.

No responsibility at all.

To understand this you must first understand what is, in fact, a right. Many wrongly think the Constitution grants us our rights as Americans, that the right to free speech is our “First Amendment Right.”  Nothing could be more wrong.  The First Amendment does not grant you a right to free speech, it says you are born with it and the government cannot infringe upon it. (Read this for an explanation of this point.)

So, if education is a right along the lines of speech, the government has no business being involved in it in the first place. Yet those seeking a “free” education for everyone do not seek a government-free education, they seek a government monopoly of it.  Since education is a human right, the involvement of government can, logically, only serve to infringe upon that right.  But that’s not what these people are really about.

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This week will be a defining moment for Congress and our country. As Democratic leaders map out their health care end game, we as elected officials have a choice to make: Will people control their lives, or will government?

The stakes of the health care debate are clear. On the table is a bill that would put the federal government in charge of one-sixth of the American economy and, perhaps even more stunningly, the way Americans get medical care. Yet far too few Americans realize there is another government takeover in the offing – this one in how Americans pay for college.

First, some history. Since 1965, the Federal Family Education Loan Program has helped tens of millions of students and parents by providing low-cost, federally guaranteed loans. This public-private partnership offers students and schools choice and competition among loan providers, as well as essential value-added benefits such as college outreach, debt management and financial literacy.

For these reasons, FFELP has consistently been the more popular choice among colleges and universities. It leverages the innovation and competitive forces of the private sector with congressionally mandated benefits and protections that keep interest rates and fees low.

Yet right now, the Majority in Congress and the President want to make it more difficult to pay for college by putting the government between you and the money you need to pay for higher education.

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There has been much speculation that today’s Massachusetts Senate race is a referendum on health care. That may be an understatement.  My guess is that this senate race could have even larger repercussions.

During an appearance on “Fox News Sunday,” this past week, Senate Minority Leader Mitch McConnell put it well when he said that President Obama’s plan to bring about “change” to America wasn’t merely limited to health care.  As McConnell noted,

“This arrogant attempt to have the government take over one-sixth of the economy on the heels of running banks, insurance companies, car companies, taking over the student loan business, doubling the national debt in five, tripling in 10. You’ve got … sort of widespread public revulsion.”

Indeed, health care is not all that hangs in the balance.  A September Wall Street Journal columnoutlined President Obama’s next move (presumably, after passing health care): A $100 billion a year government takeover of school loans.

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