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Pickings has been flogging the student loan issue for years, it’s nice to see Matt Taibbi of Rolling Stone on the case.

On May 31st, president Barack Obama strolled into the bright sunlight of the Rose Garden, covered from head to toe in the slime and ooze of the Benghazi and IRS scandals. In a Karl Rove-ian masterstroke, he simply pretended they weren’t there and changed the subject.

The topic? Student loans. Unless Congress took action soon, he warned, the relatively low 3.4 percent interest rates on key federal student loans would double. Obama knew the Republicans would make a scene over extending the subsidized loan program, and that he could corner them into looking like obstructionist meanies out to snatch the lollipop of higher education from America’s youth. “We cannot price the middle class or folks who are willing to work hard to get into the middle class,” he said sternly, “out of a college education.”

Flash-forward through a few months of brinkmanship and name-calling, and not only is nobody talking about the IRS anymore, but the Republicans and Democrats are snuggled in bed together on the student-loan thing, having hatched a quick-fix plan on July 31st to peg interest rates to Treasury rates, ensuring the rate for undergrads would only rise to 3.86 percent for the coming year.

Though this was just the thinnest of temporary solutions – Congressional Budget Office projections predicted interest rates on undergraduate loans under the new plan would still rise as high as 7.25 percent within five years, while graduate loans could reach an even more ridiculous 8.8 percent – the jobholders on Capitol Hill couldn’t stop congratulating themselves for their “rare” “feat” of bipartisan cooperation. “This proves Washington can work,” clucked House Republican Luke Messer of Indiana, in a typically autoerotic assessment of the work done by Beltway pols like himself who were now freed up for their August vacations. …

 

… the dirty secret of American higher education is that student-loan interest rates are almost irrelevant. It’s not the cost of the loan that’s the problem, it’s the principal – the appallingly high tuition costs that have been soaring at two to three times the rate of inflation, an irrational upward trajectory eerily reminiscent of skyrocketing housing prices in the years before 2008.

How is this happening? It’s complicated. But throw off the mystery and what you’ll uncover is a shameful and oppressive outrage that for years now has been systematically perpetrated against a generation of young adults. For this story, I interviewed people who developed crippling mental and physical conditions, who considered suicide, who had to give up hope of having children, who were forced to leave the country, or who even entered a life of crime because of their student debts.

They all take responsibility for their own mistakes. They know they didn’t arrive at gorgeous campuses for four golden years of boozing, balling and bong hits by way of anybody’s cattle car. But they’re angry, too, and they should be. …

 

… While it’s not commonly discussed on the Hill, the government actually stands to make an enormous profit on the president’s new federal student-loan system, an estimated $184 billion over 10 years, a boondoggle paid for by hyperinflated tuition costs and fueled by a government-sponsored predatory-lending program that makes even the most ruthless private credit-card company seem like a “Save the Panda” charity. Why is this happening? The answer lies in a sociopathic marriage of private-sector greed and government force that will make you shake your head in wonder at the way modern America sucks blood out of its young.

In the early 2000s, a thirtysomething scientist named Alan Collinge seemed to be going places. He had graduated from USC in 1999 with a degree in aerospace engineering and landed a research job at Caltech. Then he made a mistake: He asked for a raise, didn’t get it, lost his job and soon found himself underemployed and with no way to repay the roughly $38,000 in loans he’d taken out to get his degree.

Collinge’s creditor, Sallie Mae, which originally had been a quasi-public institution but, in the late Nineties, had begun transforming into a wholly private lender, didn’t answer his requests for a forbearance or a restructuring. So in 2001, he went into default. Soon enough, his original $38,000 loan had ballooned to more than $100,000 in debt, thanks to fees, penalties and accrued interest. He had a job as a military contractor, but he lost it when his employer ran a credit check on him. His whole life was now about his student debt.

Collinge became so upset that, while sitting on a buddy’s couch in Tacoma, Washington, one night in 2005 and nursing a bottle of Jack Daniel’s, he swore that he’d see Sallie Mae on 60 Minutes if it was the last thing he did. In what has to be a first in the history of drunken bullshitting, it actually happened. “Lo and behold, I ended up being featured on 60 Minutes within about a year,” he says. In 2006, he got to tell his debt story to Lesley Stahl for a piece on Sallie Mae’s draconian lending tactics that, curiously enough, Sallie Mae itself refused to be interviewed for.

From that point forward, Collinge – who founded the website StudentLoanJustice.org – became what he calls “a complaint box for the industry.” He heard thousands of horror stories from people like himself, and over the course of many years began to wonder more and more about one particular recurring theme, what he calls “the really significant thing – the sticker price.” Why was college so expensive? …

 

… Talk to any of the 38 million Americans who have outstanding student-loan debt, and he or she is likely to tell you a story about how a single moment in a financial-aid office at the age of 18 or 19 – an age when most people can barely do a load of laundry without help – ended up ruining his or her life. “I was 19 years old,” says 24-year-old Lyndsay Green, a graduate of the University of Alabama, in a typical story. “I didn’t understand what was going on, but my mother was there. She had signed, and now it was my turn. So I did.” Six years later, she says, “I am nearly $45,000 in debt. . . . If I had known what I was doing, I would never have gone to college.”

“Nobody sits down and explains to you what it all means,” says 24-year-old Andrew Geliebter, who took out loans to get what he calls “a degree in bullshit”; he entered a public-relations program at TempleUniversity. His loan payments are now 50 percent of his gross income, leaving only about $100 a week for groceries for his family of four.

Another debtor, a 38-year-old attorney who suffered a pulmonary embolism and went into default as a result, is now more than $100,000 in debt. Bedridden and fully disabled, he accepts he will likely be in debt until his death. He asked that his name be withheld because he doesn’t want to incur the wrath of the government by disclosing the awful punch line to his story: After he qualified for federal disability payments in 2009, the Department of Education quickly began garnishing $170 a month from his disability check. …

 

… In a way, America itself is violating the Truth in Lending Act. It’s cheering millions of high school graduates toward college every year, feeding them into the debt grinder under the banner of increased opportunity, when full disclosure would require admitting that there isn’t a hell of a lot waiting for them on the other side, where the middle class has nearly vanished and full employment is going the way of the dodo.

We’re doing the worst thing people can do: lying to our young. Nobody, not even this president, who was swept to victory in large part by the raw enthusiasm of college kids, has the stones to tell the truth: that a lot of them will end up being pawns in a predatory con game designed to extract the equivalent of home-mortgage commitment from 17-year-olds dreaming of impossible careers as nautical archaeologists or orchestra conductors. One former law student I contacted for this story had a nervous breakdown while struggling to pay off six-figure debt. It wasn’t until he tapped into one of the few growth industries open to young Americans that his outlook brightened. “I got my life back on track by working for a marijuana delivery service in Manhattan,” he says. “I’ve had to compromise who I am . . . because I started down a path that I couldn’t turn away from. Student loans aren’t hope. They’re despair.”

Good spot for this on NYU salaries from the Daily Caller.

New York University President John Sexton has decided to resign, following weeks of criticism over the lavish perks he received — including a vacation home financed with university loans.

He is set to leave NYU in 2016 — after collecting a $2.5 million bonus.

Sexton makes $1.5 million a year, and is one of the highest paid college presidents in the country. He also took advantage of a university loan program that helps top faculty and administrators afford luxurious vacation homes on New York’s Fire Island and the Hamptons.

His tenure as president was marked by a dramatic shift toward growing the business prestige of the university, as well as its physical boundaries. He has enacted a $2 billion expansion of the campus, angering residents and some faculty members, who voted “no confidence” in his leadership.

NYU’s board of trustees stressed that his decision to leave was his own, and that they remained happy with his leadership. …

The government is hiring “navigators” to assist us in enrolling in the new healthcare plan. In a post that should have appeared yesterday, Andrew Malcolm gives us the skinny on our new helpers.

… Have you heard of “navigators”? No, not Ferdinand Magellan or Vasco de Gama. These new battalions of government employees are being hired to help applicants enroll quicker for this Rube Goldberg-monstrosity called ObamaCare. Isn’t that thoughtful?

These navigators will have absolutely zero background in insurance. But they’ll be full of advice on what’s best for you. And given Obama’s record of truthfulness, who wouldn’t trust a total government stranger implementing Obama’s health plan? …

… But here’s the teeny, tiny problem with these navigators.

In the interests of, you know, moving things along quickly, the Obama administration will not be vetting these navigators. No background checks. No resume or education verifications. Takes too much time, you see. …

… Obama people suggest private insurance reps just don’t want the competition and promise that navigators will undergo training. They better hurry.

Training or not, the new situation opens the door wide for fraud and identity thieves, who will know virtually anything that matters about you, your income, Social Security and military records. While their government employer will know very little about them or their record. And if some identities get stolen, who will be responsible?

Thank goodness we didn’t elect to the White House a businessman with decades of experience running vast personnel operations.

At least 18 states have begun or are considering imposing tougher certification procedures on navigators. But the feds warn these local limits can not impact ObamaCare rules in any way.

Oh, and to boost the number of government employees and dues-paying union members even more, each of these navigators will have an assistant, who will have the same vast data access. And that assistant will not be checked either.

What could possibly go wrong with any of this?

WSJ Review of Golf in America claims ancient origins for the game’s skills. Pickerhead thinks a better case could be made for baseball which uses important skills used in killing at a distance – throwing and swinging a club. Take a look at riots in the Arab street. Because they’re soccer players, they can’t throw rocks and bricks with accuracy.  This makes it harder for primitive peoples to bring down their governments. 

In ‘The Art Instinct,’ a book about evolutionary psychology that has little to do with golf, the late Denis Dutton quotes scholars on the notion of an ideal landscape, one that humans have evolved to see as beautiful. It is a landscape like the ones where mankind arose in Africa, rolling grasslands with signs of water and groups of trees and bushes where our forebears hunted and gathered.

 

Crouched with clubs in their hands, squinting at the distance, these hominids look familiar, to my mind’s eye. Trade the bare feet for FootJoy shoes, and they are golfers looking at the water hazard to the left, the out-of-bounds trees to the right, the rolling grassland called a fairway.

At the roughly 15,000-20,000 golf courses in America, half or more of the golf courses in the world, we can fulfill our savanna heritage. The courses I play have deer and fox running across the fairways instead of dik-diks and hyenas, but the view is the same. In the deep American South an atavistic touch is the alligator sunning next to one’s ill-struck drive. …

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Today we spend most of our time on healthcare. John Steele Gordon picks up on a NY Times idea for health care cost reform.

… Two weeks ago, I wrote about the medical outrage called the chargemaster, the exhaustive list of prices for procedures, drugs, and medical equipment that every hospital maintains and which every hospital refuses to reveal—until they send the bill. Interestingly, even the avidly pro-ObamaCare New York Times editorial page has noticed that price transparency is a big problem in the American medical marketplace.

Tina Rosenberg writes in today’s Sunday Review section:

“Here is a basic fact of health care in the United States: Doctors and hospitals know what they charge, but patients don’t know what they pay. As in any market, when one side has no information, that side loses: price secrecy is a major reason medical bills are so high. In my previous column, I wrote about the effect of this lack of transparency on the bills patients pay out of pocket.”

Here is an obvious reform that wouldn’t cost the federal government one cent and would exert an immediate and powerful downward pressure on medical costs: require that medical service providers make those chargemasters public. Market forces would instantly force the prices down towards the low end.

The natural forces that dominate an economy would do the work, and the Republicans can have the credit for lowering medical costs. What’s not to like?

Next a couple of items from Debra Saunders from SF Chronicle. First, she asks if the president owns obamacare.

If House Republicans had somehow erased chunks of the Affordable Care Act — the employer mandate, the ability to screen who gets subsidies and the annual cap on out-of-pocket costs for a year — the Democrats would have blasted those moves as unconscionable acts of sabotage. But the GOP didn’t sneak in those changes. President Barack Obama did.

The New York Times reported this week that the administration didn’t even announce its decision to delay a cap on copayments in many health care plans. “The grace period has been outlined on the Labor Department’s Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoted,” the Times reported.

Democrats argue that because Republicans don’t like Obamacare, they shouldn’t complain when the White House delays provisions.

This week, Health and Human Services Secretary Kathleen Sebelius slammed Republicans who want to overturn Obamacare. She said: “It was passed and signed three years ago. It was upheld by the Supreme Court a year ago. The president was re-elected. This is the law of the land.”

OK, then, who made Obama king, and how does he get to override a law passed by Congress? …

Next Ms. Saunders writes on the president’s maneuver to exempt congress and its staff from healthcare reform.

… As a result of that brilliant maneuver, senators and congressmen will be able to exempt their staffers if they so choose. Capitol Hill, it turns out, is one colossal golden-domed exemption.

In pushing his amendment in 2010, Grassley rightly argued: “It’s only fair and logical that administration leaders and congressional staff, who fought so hard to overhaul America’s health care system, experience it for themselves. If the reforms are as good as promised, then they’ll know it firsthand. If there are problems, public officials will be in a position to really understand the problems, as they should.”

But there’s this ugly reality on ObamacareIsland: The rules do not apply to the people who make them.

Andrew Stiles writes about the coming “train wreck.”

The White House plans to delay yet another provision of Obamacare, the New York Times revealed on Monday, in what was described as “another setback for President Obama’s health-care initiative.” Indeed, it seems that every week the administration offers up a new example of the implementation “train wreck” of which Obamacare architect Max Baucus (D., Mont.), among others, has warned.

Here are nine examples of how Obamacare implementation hasn’t gone according to plan:

1. Caps on Out-of-Pocket Insurance Costs
The Obama administration plans to delay until 2015 a provision that limits out-of-pocket health-care costs, including deductibles and co-payments, for individuals ($6,350) and families ($12,700). In the meantime, many insurers will be able to set higher limits on out-of-pocket costs, or no limit at all.

The obscure ruling, which received attention this week despite being published on the Labor Department’s website back in February, has drawn complaints from advocacy groups representing individuals with chronic illnesses, who argue that patients requiring expensive drug treatments will face exorbitant out-of-pocket costs in the absence of caps. “The promise of out-of-pocket limits was one of the main reasons we supported health-care reform,” Theodore M. Thompson, a vice president of the National Multiple Sclerosis Society, told the New York Times.

President Obama repeatedly touted the limits on out-of-pocket expenses in his effort to win support for the law. “No one should go broke because they get sick,” Obama told a joint session of Congress in September 2009. In explaining the decision to delay the requirement, a senior administration official told the Times, “We had to balance the interests of consumers with the concerns of health-plan sponsors and carriers” who “asked for more time to comply.” …

It is so bad, CNBC is running pieces on how to avoid the con-artists that are swarming to obamacare.

As the debate rages over who benefits from the Affordable Care Act, one thing is becoming clear: The controversial program is a dream come true for rip-off artists.

Consumer experts warn that the program has created a huge opportunity for swindling people by stealing their money and their sensitive personal information.

“Any time you roll out a big government program like this, confusion is inevitable,” said Lois Greisman, an associate director in the Bureau of Consumer Protection at the Federal Trade Commission. “This confusion creates a tremendous opportunity for the fraudster.”

Scammers have been at it for more than a year now, but consumer advocates and security experts warn that the problem will worsen as we get closer to Oct. 1. That’s when the millions of uninsured Americans can use a health insurance exchange, set-up by their state or by the federal government, to shop for coverage.

“I believe the incidents are going to skyrocket as that date approaches,” said Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center. “And even people who are smart and savvy could get taken, so we are very concerned about the potential for some serious financial harm.” …

For a welcome change of pace, we go to Birmingham, MI, in suburban Detroit for last weekend’s dream cruise. The story is from the NY Times.

It’s Dream Cruise week in metro Detroit, and Woodward Avenue, main street to the American auto industry for more than a century, is dancing to the rumbling beat of some 30,000 muscle cars, street rods and classics.

A crowd estimated at more than one million has been gathering for days to witness Saturday’s bumper-to-bumper parade of automotive excess. The revelers are celebrating what the MotorCity does — and honoring the Woodward tradition of cruising, an automotive ritual of youth that’s generations old and hit a peak in the 1950s and ‘60s, glory days for Detroit’s industry.

The first Woodward Dream Cruise — a fund-raiser for a soccer program — took to the streets in 1995 and proved far more popular than organizers had anticipated. It returned the next year and each year since. Today, it is a mammoth outdoor party that’s a pilgrimage for enthusiasts who make the trek and a marketing showcase for automakers and sponsors.

Among those enjoying the festivities are Dave and Shirley Ziolkowski. The Ziolkowskis are well into retirement; he’s 70 and she’s 66. Their home is a modest ranch house in the quiet suburb of Sterling Heights, and their car is a 1988 Dodge Shadow, just the sort of thrifty transportation one might expect to find in the garage of seniors.

But the Ziolkowski’s Shadow shares little with the 93-horsepower front-drive compact that Chrysler built in 1987-94.

 In the lexicon of hot rodders, it’s a pro-street custom, with flaming-red sheet metal that conceals a professional-grade racecar frame and a brawny Chrysler V-8.

Subtlety is not part of the package: