A recipe for inviting socialism to our shores without us knowing.
If you want to understand how socialism can come to our shores without us knowing, all you need to remember is a simple recipe. It goes as follows:
1. The government identifies a problem that needs to be solved and goes about writing legislation to solve the problem.
2. The problem, in reality does not get solved, but gets progressively worse. The government identifies the “free market” as the problem and thus authorizes legislation to solve the problem to the problem it created to solve the problem it originally identified.
3. The problem gets even worse, but the government blames the “free market” again and promises to fix the problem.
4. The problem gets even worse, but finally the government decides that the “free market” has messed everything up and decides to nationalize whatever economy it always believed was the problem.
Seems contrite and stupid, no? Well, that’s exactly how the government took over the student loan market:
Student loan “reform” slipped into the national agenda rather quietly in January 2007 when New York Attorney General Andrew Cuomo began to investigate reports that Sallie Mae, the nation’s largest lender to students, had been engaged in some questionable practices. As it turned out, many private lenders had bribed college officials, and numerous colleges had abused their students by channeling them into disadvantageous loans. The scandal snowballed. It grew worse as then Secretary of Education Margaret Spellings appeared to stonewall inquiries and cover for the Republican-friendly Nelnet Corporation, a student loan re-financer that had gamed a DOE program to extract hundreds of millions of unwarranted payments. The mischief culminated in an ill-considered law signed by president Bush in September 2007, the College Cost Reduction and Access Act, CCRAA, that cut the payments to private lenders in the federally guaranteed student lending business so drastically that many of the lenders—some sixty of them—simply quit.
That added more snow to the snowball by creating the prospect that students would have a much harder time finding loans the following year. Congress recognized its mistake and in May 2008 rushed through a bill that authorized the Department of Education to buy up “debt” from the private lenders. In many ways this was a rehearsal for the great economic collapse and bank bailouts that came later in 2008.
Of course, this wasn’t done in a vacuum: the Dems attached this beautiful nationalization of the student loan market to the Patient Protection and Affordable Care Act of 2010*. I know there is irony in that statement, but I just can’t figure out what the irony is.
Oh, and supporters of this maneuver should really be careful what they wish for:
With direct federal control of student loans will come, as surely as a hangover follows a binge, federal control over the content of higher education.
“Education panels”, anyone?
*That’s Obamacare for any simpleton who can’t figure out how to tie their own shoes.
UPDATE: Daniel Foster at NRO concurs with my analysis.