President Obama Is Looking To Extend The School Year

BDesvignes said: Going around the world apologizing to the world does nothing to help us.

Really? You believe that? That's sad.

In an effort to move the discussion forward, I concede my last post. Thank you, Carrie, for the update; it's not a business I have been following that closely. :)

Now where were we...

Oh, yes, on the foreign policy thing. George II didn't make any friends because unlike his predecessor, he took the attitude that as President of the United States, his duty was to protect the best interest of the United States, and if the rest of the world didn't like it, that was their problem. And he was right, because all the other nations operate in their own self interest, why shouldn't we operate in ours? Trouble is, he is not by any means a "diplomat". I'm encouraged by President Obama's statements to the UN about preserving our interest in the world; I just hope his actions are consistent with his words.

--Dave Althoff, Jr.

Going around apologizing is kinda like Neosporin...it lets the healing begin. Probably more relevant for our allies with whom the relationship had been....strained...to put it mildly.

Gosh, I can't imagine why anyone would view a nation as hostile for invading a country that posed no threat, led by an impotent dictator. Who knew that could be misinterpreted?

Makes you long for the good old days of the '90s when the world showed its love for us by bombing the World Trade Center (the first time), the USS Cole, and dragged Marines through the streets of Mogadishu.

Jeff, that's a dangerous, albeit popular, argument. The most obvious problem with it is that it drags out the screamers on both sides, with the predictable result that the discussion goes nowhere. The other problem is that it applies a standard of "what we know today" to actions taken in the past. I do not understand the motives of an internationally impotent dictator. I do not know why he made a show of implied capability and implied strength that had not just the United States, but much of the world convinced that he was far more powerful and far more dangerous than he really was...and when faced with the certainty of a US-led invasion chose repeatedly to refuse to comply with the orders that would have stopped such an invasion. HIS biggest error was failing to learn the important lessons demonstrated by the tyrannical dictators who run Libya and Cuba: keep your dictatorial ambitions confined to your own country and you can be a tyrannical dictator with impunity so far as the USA is concerned.

Meanwhile, the biggest mistake made by the United States in Iraq was to underestimate the degree to which Saddam Hussein had *eradicated* all domestic opposition to him.

--Dave Althoff, Jr.

The thing we know now, Dave, is that our leaders never had any actionable evidence to justify invading the country. We only had "take our word for it." What we knew then, at least those of us paying attention, is that it was a popular cause only because the same leaders pitched it as being vaguely related to terrorism and 9/11, which was completely absurd. The war was politically motivated from the start, and the cost in terms of human lives and dollars has been catastrophic.

If what the feds did in May 2008 was a bailout, it was a bailout of college students not student loan lenders. Without that "bailout," there would have been no student loans for college students. The lenders didn't need to be bailed out (at least not with respect to student loans) because they didn't need to make student loans to survive. Bailouts for banks were required with respect to bad loans (which the student loans were not because of the feds' guarantee).

And that "bailout" didn't allow the student loan system to continue as is. It totally changed it. The feds got involved in student loans to help folks go to college. College kids aren't necessarily very good credit risks. Who knows if they will even graduate much less get a job that pays enough to repay the loan. So banks had little interest in making student loans (at least not at interest rates that would be affordable to most college kids). The feds could have made the loans directly but the treasury is broke so they would need to incur more debt in order to fund the loans. So the feds guaranteed the loans (letting the lenders come up with the actual cash to make the loans). When the feds started buying student loans, the fundamentals of the system totally changed because now the feds need to come up with the cash up front (increasing the debt). And the lenders at that point are no longer providing the liquidity for new loans (because as they make new loans the government is buying them so the lenders have no new net loan exposure) so the only thing they are doing is servicing the loans. If you look at the direct loan program, lenders will still be servicing the loans; they just won't be acting as the equivalent of mortgage brokers. So although the government isn't making direct loans now to students (no one is going to their regional federal reserve bank to pick up tuition checks), because the government is buying the loans from the lenders, the government is "essentially" making direct loans. If you look at the current system of the government buying loans and the direct loan program, there is very little difference in terms of who actually needs to come up with the funds to make the loan. And as the fundamental change had already occurred in May 2008, all the lenders were lobbying to retain was the right to act as student loan brokers.

And the direct loan legislation doesn't say much at all about the effects of lobbyists other than you need to lobby the right folks in Congress. The power and influence that lobbyists/special interests have in DC doesn't come from heavy persuasion. It comes from financial support. The student loan lenders gave financial support to the republicans. In 2006 they found themselves on the wrong side of the majority. They tried to toss some money the key dems but it was too late. And in the end, because of what happened with the credit crunch, the choice wasn't between keeping the student loan program as it was before the credit crunch and going direct loans (at least for the foreseeable furture until the credit markets recover); it was between making direct loans and continuing to let studen loan lenders act instead as student loan brokers.

The notion that lobbyists/special interests do not have huge influences in DC seems foolish to me. Do you think the various industries/interest groups would spend the large sums that they do if they didn't get their moneys worth? And the lobbyists/special interests typically play large roles in drafting legislation. They do not do that with the best interests of the democracy and its citizens in mind.

Another big problem we have (and the Obama administration certainly is included) is that we select our regulators from the private sector in the very industries they are hired to regulate. From an experience concept, that makes some sense but it creates huge conflicts. They are left to regulate their friends/collegues. In addition, when their terms are up, they typically go back to private industry. How hardnosed do you expect them to be knowing they will be sitting in interviews seeking jobs before they very same people they hounded when they were in government?

I brought up the money that student loan lenders made because you brought it up in a post before Dave posted that the lenders didn't have much interest anymore. So unless you can predict the future, you could not have been responding to Dave's post. So if there was any misdirection or entirely different discussions involved, you started it. :)

How do you feel about healthcare? Many/most doctors, nurses, hospitals, etc. are in the business of serving the government medicare program. Should the government take over healthcare to capture profits made in it to support more government programs? How about defense contractors? They are in the business of supporting a government program. Should the government take over them too? How involved in serving government programs does a private industry need to be before you would want to consider the government taking it over capturing its profits to provide more government programs? :)

In the end, I do not see what happened with student loans, knowing that the program as it operated prior to 2007 was essentially dead and knowing that the student loan lenders will likely be back with the ebb and flow of things, as a major change. More like politics as usual.

With respect to Iraq, it may be the case that Saddam was more concerned with what Iran thought of his WMD ability than with what the US thought.

That's a good point, but I think there came a point where he had to know that Iran was much less of a threat to him than the United States. And yet, his obstinence continued. By the time the invasion started, the one actionable item we *did* have was the solemn pledge of the United States to conduct an invasion if the specified conditions were not met. Was it justified? Was it reasonable? At this point it is little more than an academic debate. Not to be dismissive about it, but that's a debate that should have happened some eight years ago. That it didn't is a shame, and that anybody ever thought it had any meaningful connection to the 2001 terrorist actions is almost tragic.

One more thing I need to address:
GoBucks89 wrote:

Another big problem...is that we select our regulators from the private sector in the very industries they are hired to regulate. From an experience concept, that makes some sense but it creates huge conflicts.

It's a rather interesting problem, isn't it? Regulators have to have an innate understanding of not only the industry they are regulating, but also the people they are regulating. At the risk of actually bringing the discussion on-topic, it is worth noting that this is one of the charges about the amusement ride safety programs: that the inspectors are former park and carnival people. Well, yes. Who else will not only understand how to do the job right, but will also be able to understand all the weird ways that people can do the job wrong? I wonder, though...in the ride safety world the regulators seem to have the independence to conduct the people's business effectively, why does it not seem to work as well in other areas of government regulation? Is it because it feels less wrong when the stakes are dollar figures instead of human life?

--Dave Althoff, Jr.

The Ensuring Continued Access to Student Loans Act (ECASLA) was specifically created in lieu of expanding the Direct Lending program at the time. It was not synonymous with Direct Lending.

In fact, part of the legislation required lenders who participated in the buy back program to continue making new FFEL loans. The entire purpose at the time (aside from the obvious desire to continue offering loans to students) was to make it possible for the lenders to get the capital they needed to continue in the program.

ECASLA only provided temporary authorization to the Department of Education to purchase loans and the program was set to expire by the end of the 2009/2010 academic year. At that point, FFEL was expected to continue. ECASLA was a bandaid for the bleeding FFEL program to get it by until the market rebounded. It was a FFEL bailout.

Under Direct Lending, the schools themselves will administer the loans via the Common Origination and Disbursement protocol established directly with Department of Education. They will directly draw down the funds from the Treasury and disburse them to the students. They have the ability to service the loans themselves and some will. Many lenders are scrambling now to become Direct Loan servicers because they still want a piece of the pie, but their role is largely marginilized in the Direct Loan program.

Your commentary about the power of lobbying is twisting my specific example into a generalization. I am pointing out that the banking industry who have lobbied their interest in the student loan debate for many years and continued to win, finally lost. That loss occurred under the Obama administration and I'm willing to give them credit for that. That you won't is your choice. But what other lobbyists do and have the power to control is not for me to say.

The rest of your post about private industry serving government programs is not a philosophical discussion I care to engage in really. I believe every program should be examined thoroughly and the best option for running it should be implemented. Sometimes that will be relying on the government to run things, sometimes not.

Dave -- I don't know what Saddam was thinking and when. But I think he may aslo have been relying on the fact that he was able to get away with largely ignoring UN sanctions since they had be imposed. And he may have thought that even after Afghanistan, we would not invade (looking back in part at what we did after we pushed him out of Kuwait in the first Iraq war). But I don't know.

My thoughts on the reason we went into Iraq (and its totally 110% speculation based on in large part the fact that every other reason that is ever advanced just doesn't make any sense) is that Bush/his administration decided that it was very important to have another stable democracy in the Middle East. We had hoped that the people of Iraq would throw Saddam out after the first war but that didn't happen. Its always better to have folks make decisions on their own rather than having them forced upon them. But we had an opportunity to make it happen on our own which might work though less than the ideal method. They couldn't go to the public with that as a reason so they made up another reason. They may have known the reports of WMDs were wrong/outdated. But we did know that he had them at one point (using them on his own citizens) and in general was a leader that few folks (even if they don't support the war) were sorry to see gone. Bush staked his entire presidency on that decision. If there is a stable self supported democracy in Iraq at some point down the line and that helps stabilize the region, I think history will view Bush II in a positive light (on balance). If not, he will be viewed as a failure. Who knows what will happen at this point though I am not sure the odds look good.

With respect to ride inspectors, how much money is there? A lot of people who bounce from the private sector to the public sector and back again make millions of dollars. More money at stake makes corruption more likely.

If you look at the current financial problems of the country, you find something which is pretty rare (at least in the private sector): folks who caused the problems/looked the other way in face of the problems not wanting to rock the boat because they money was good are in charge of fixing it. In most instances, you cause/didn't take steps to avoid a problem even 1/1000th of the problem we have now would have been fired long before they could propose a way to fix it much less get to try to fix it.

wrt. Iraq: I think you're pretty close to the mark. The main reason was "unfinished business" with the fact that Saddam Hussein failed to learn anything useful from his first spanking a leading issue. There are lots of reasons that he needed to go, and the opportunity to build a stable and friendly regime in the middle east was too good to pass up, particularly with the extant dictator being a bit of an international jerk and a diplomatic time-and-effort sink. The opportunity to put a US-friendly force right on Iran's doorstep (note that the recent revelations about Iran's covert nuclear program have been known by the US since back when it was mispronounced "nucular") was probably a pretty attractive bonus given that we kind of have to play the containment game with that one. I firmly believe that the WMD argument, which was always kind of thin, was specifically to bring Europe on-board.

wrt. ride inspectors: Good point. There is not a lot of money involved in ride regulation.

--Dave Althoff, Jr.

Carrie M. said:
The Ensuring Continued Access to Student Loans Act (ECASLA) was specifically created in lieu of expanding the Direct Lending program at the time. It was not synonymous with Direct Lending.

***I never said the feds were making direct loans under ECASLA. I said they were effectively making direct loans. Big difference.

***How could the feds have replaced FFEL with direct loans in May 2008? It was emergency legislation enacted to make sure college students were able to pay tuition in fall (which also helped out colleges/universities who were depending on those tuition checks). To go to direct lending, the feds needed to work with colleges/universities to establish procedures and to arrange for servicing of the loans. They didn't have time to do that in May 2008. What they did was totally seemless to colleges/universities and students even though it fundamentally changed the economics of the program.

In fact, part of the legislation required lenders who participated in the buy back program to continue making new FFEL loans. The entire purpose at the time (aside from the obvious desire to continue offering loans to students) was to make it possible for the lenders to get the capital they needed to continue in the program.

***That is exactly why what the feds were doing under ECASLA was effectively making direct loans. Look at the economics of the program. If I am a student loan lender with $100 million of existing student loans on the date the program starts, the feds buy those $100 million in loans from me and I then use the fed proceeds to make new student loans of $100 million, have I really made any new loans from an economic standpoint? As a result of the program, I have the same amount of loans outstanding (to different students yes, but with the fed guarantee there isn't any difference in risk levels though I will receive checks from different people) and my cash position hasn't changed. The feds have $100 million of additional loans and $100 million less cash (and really they have $100 million more in debt because they needed to borrow the money to buy the student loans from me). Now lets compare what would have happened if the feds had just been making direct loans under the May 2008 legislation. I still have the $100 million of student loans and my cash position doesn't change. The feds have $100 million of additional loans and $100 million less cash (or again, owe more debt having to borrow to make the loans). Not much of a difference.

ECASLA only provided temporary authorization to the Department of Education to purchase loans and the program was set to expire by the end of the 2009/2010 academic year. At that point, FFEL was expected to continue. ECASLA was a bandaid for the bleeding FFEL program to get it by until the market rebounded. It was a FFEL bailout.

***ECASLA was a temporary fix. Hope was that the credit markets would be functioning again and the student loan lenders would be able to raise capital independently without having to get money from the feds. But that didn't happen and there is no way of knowing when it will happen. Faced with that uncertainty, the feds decided to follow the economics of what was already in place. And unlike in 2008, the feds had the time to get the needed processes in place.

***So first it was a bank bailout. Now its a FFEL bailout? :)

Under Direct Lending, the schools themselves will administer the loans via the Common Origination and Disbursement protocol established directly with Department of Education. They will directly draw down the funds from the Treasury and disburse them to the students. They have the ability to service the loans themselves and some will. Many lenders are scrambling now to become Direct Loan servicers because they still want a piece of the pie, but their role is largely marginilized in the Direct Loan program.

***Article that you linked indicates that the government has already contracted with the 4 largest education lenders to service the government's direct loans. So as a result, as the article also indicates, from a practical perspective most students won't notice a difference between direct loans and FFEL loans.

Dave -- Another point with Iraq is that we needed to establish that UN sanctions, and the failure to comply with, them means something. Partially for Iraq but more importantly for the other kids who don't play well in the sandbox--Iran and North Korea--with potentially much worse consequences.

Mamoosh said:

BDesvignes said: Going around the world apologizing to the world does nothing to help us.

Really? You believe that? That's sad.

Yes I do beleive that. It shows weakness. We have nothing to apologize for as a nation and his apologies only embolden our enemies. We have sacrificed more than any other nation to defend freedom around the world.

He tells the French that America has been arrogant, dismissive, and derisive. In Turkey he says that we are still working through darker periods of our history. He also said that we have been disengaged and at times we've sought to dictate our terms. He's telling people that we made hasty decsions and went of course. He's acting like he hates America. He should be going around the world talking about all the good that we do and the sacrifices our soldiers make. Instead he has Castro, who hates America, praising him, and Qaddafi wanting to adopt him as a son and wanting him to be president for life. We are heading in the the wrong direction.

Wow, now I'm afraid. Admitting you make mistakes doesn't "embolden" anyone, it gives comfort to our allies that we (presumably) won't be going off half-cocked invading countries where we have no business sending our military. It sends the message that we respect the opinions of those who we say we care about. "Dictating terms" is a large reason that we don't have the support we once had...and a large reason we don't deserve that support.

Bottom line: We have alot to apologize for....and getting about it starts opening up a new dialogue, where we consider our allies to be important to us, and we don't run roughshod over regimes that we don't like. "Might" does not make right. Our observance of that fact means that we can *re-join* the rest of civilized society...

BDesvignes said:
Yes I do beleive that. It shows weakness. We have nothing to apologize for as a nation and his apologies only embolden our enemies. We have sacrificed more than any other nation to defend freedom around the world.

Wow... drink that Kool-Aid®.

I wonder... where were we defending freedom when places like Darfur, Rwanda, Somalia, Serbia, Bosnia, etc., when massive genocide was occurring? If you're going to play the role of world police, you can't just do it when there's oil involved.

And ditto for what Bill said.

But Jeff, some of those places we actually did make an effort to stop the bloodshed. Somalia, Serbia, Bosnia, Kosovo -- all places in which Clinton intervened for the greater good. The first one, Somalia, a situation inherited from George H.W. Bush, turned into a rout before we even had significant forces on the ground. (Not that Bush's decision to bring force to bear was the direct cause of the failure.)

The other three were successes -- spectacular successes even, when held up next to Iraq and Afghanistan. Also remember that in all of those conflicts the right wing was screaming bloody murder the whole time. Just as they screamed bloody murder when Clinton tried to have Osama Bin Laden killed. If I remember correctly, the Republicans were rather busy trying to impeach the president over a stained dress and were somewhat put out when his actual direction of government policy to protect the nation temporarily distracted the news media from that effort.

As far as Iraq goes, Bush (or at least Cheney and the other neocons) were hell-bent to get back in there, long before 9/11. Remember that at the time Bush made the decision to pre-emptively invade that country, there were U.N. weapons inspectors on the ground in Iraq, doing there jobs and proceeding briskly. Just imagine how different the last decade might have been had Bush actually allowed those officials to complete their work.

Don't even get me started on the trumped up, massaged, often outright phony intelligence that was used to justify the war and ram passage through Congress.

As for Afghanistan, that was the right war of the two, and the only one started with real justification. Of course, Bush starved our forces there in order to feed the campaign in Iraq. In 2002-2004, we had the momentum in Afghanistan, we had the Taliban on the run, we virtually had Osama Bin Laden in our sights. Does anybody else remember when Bush declared that "it doesn't matter whether we capture" Bin Laden or not? And now, that war has turned into a morasse, a Vietnam-like "quagmire" that probably can only be won by the infusion of a two or three hundred thousand additional forces, emplaced for 5 - 10 more years. Which in any universe ain't gonna happen.

I get sick and tired of the revisionist history being undertaken by the right-wingers. Tell it like it is.

I'm not interested in this becoming a partisan debate, but as much as I'm a fan of Bill Clinton, his efforts to make anything happen in any of those conflicts was half-hearted at best, relegating most of the responsibility to the UN (which also did next to nothing). Rwanda in particular was a tragic example of inaction.

I do agree that the UN inspectors were yanked out of Iraq too quickly, and the fact that they continued to find a whole lot of nothing only made the case for invasion even more week. We were sold that war on false pretenses, and to date there is no evidence on those three factors (WMD's, terrorism connection and active genocide).

Clinton himself confessed that not intervening in Rwanda was his greatest regret. Not that that excuses our inaction in the slightest, or in any way diminishes the horror and death multiplied by many thousands there.