Government and Selective Inflation

August/05/2014 5:49AM
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If you wanted to create a housing bubble, what would you do? First, have a president like Bill Clinton say “owning your own home is a basic right in  America”.  Then you put in place lending organizations that will make that happen. Like Freddie, Fannie, and the FHA. Government run institutions that will buy any bogus mortgage from any private lender. Then you will force all lenders to have a certain percentage of minority loans. After your little system gives mortgages to millions who can’t afford to own their own home, sorry Mr. Clinton but it’s a reality owning your own home requires you to be able to actually pay a monthly mortgage amount, the bubble bursts. Millions of mortgages not being paid pushes down the price of houses and millions go underwater. Now you rush in and bail out most of the banks that own bad paper. Now, in 2013 and 2014 you extort payments from some of those banks for playing the game you established with your rules.

Now you turn your attention to colleges and universities. President Obama in one of his serial bloviations says “getting a college education is a basic right in America.” You take over the student loan business and stop banks from making student loans. Next, you increase the government aid for students, increasing demand for a college education. Schools raise prices. Students who can’t cut it go to college flunking out and defaulting on student loans. Next, you get in the business of rating colleges. Obama now plans to introduce a system to do just that based on variables like their numbers of financially needy students, average age, tuition costs and loan debts, graduation rates, alumni earnings, and percentage of graduates who go on to get advanced degrees. Let the lying begin just as it has in high schools on student tests that determine teachers’ pay.

Here’s the real issue. The easy money has allowed colleges and universities to bloat. Administrative costs at every college and university have doubled, on average, in the past ten years. Mitch Daniels, the former governor of Indiana, who cut the fat from the state and balanced the state budget, is now the president of Purdue University. He has frozen tuition and begun to cut the fat. But, most efforts meet with faculty and student protests. Our students today are so influenced by far-left faculty that they will protest when someone is trying to reduce their student loans. Would you hire one of these fools?

Paul Robinson, a former president of the faculty senate, said Mr. Daniels’s worth as a leader will be tied to his ability to prune that administrative bloat. “Let me put it this way,” Mr. Robinson said: “A blind man on a galloping horse at midnight with sunglasses on can see the problem. pudue tuitionThe question is, What can he do about it?”


So the tuition bubble, so similar to the housing bubble, marches on and will do so until it bursts and the country will face a trillion dollars of bogus student loans that can’t be repaid.

Obama, like Clinton on the housing bubble, will be long gone when that happens.  If your kids pay for college or repay their student loans they will be really unhappy when those who don’t get forgiveness. Just like the ones’ who walked away from houses they lived in or trashed and then stayed for 18 months after they stopped paying the mortgage. See we punish those who do the right thing in this country today and reward those who skate. It’s the new American way.

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