This week marks the 40th anniversary of the Staggers Rail Act of 1980, which deregulated American freight…
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Happy 40th to the Staggers Rail Act, Which Deregulated and Saved the U.S. Rail Industry

This week marks the 40th anniversary of the Staggers Rail Act of 1980, which deregulated American freight rail and saved it from looming oblivion.

At the time of passage, the U.S. economy muddled along amid ongoing malaise, and our rail industry teetered due to decades of overly bureaucratic sclerosis.  Many other domestic U.S. industries had disappeared, and our railroads faced the same fate.  But by passing the Staggers Rail Act, Congress restored a deregulatory approach that in the 1980s allowed other U.S. industries to thrive.  No longer would government determine what services railroads could offer, their rates or their routes, instead restoring greater authority to the railroads themselves based upon cost-efficiency.

Today, U.S. rail flourishes even amid the coronavirus pandemic…[more]

October 13, 2020 • 11:09 PM

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Clinton’s “New College Compact” Is “No Child Left Behind” for Higher Ed Print
By Ben Boychuk
Thursday, August 13 2015
It doesn’t require much imagination to see that pumping an additional $35 billion a year into higher education wouldn’t stem the tuition cost curve — it would accelerate it.

Political scandal always makes for more salacious news than arguments over mere public policy, so word this week that Hillary Clinton’s trove of personal e-mail during her tenure as U.S. Secretary of State contained highly classified material was bound to dominate headlines.

Which is a shame, really. Because the Democratic presidential frontrunner’s announcement Monday of a “New College Compact” deserves more scrutiny than it’s now likely to get, apart from a few editorials and second-day analysis stories.

Here’s the gist of Clinton’s proposal: Loans would become grants, at least for students who attend a public college or university; other borrowers would be able to enroll in an income-based repayment program; and community college would be free to all comers.

Total cost: $350 billion over 10 years. Where will she find that kind of money? Through wealth transfers, of course. Clinton’s plan would cap income tax deductions and “close loopholes” on upper income earners.

It’s an article of American faith that a college degree is — or used to be — a ticket to a solidly middle-class life. If a university education was good for a few, it should be good for a great many. Giving more and more people access to higher education, therefore, is worthy policy goal. But a university education is expensive and getting more so by the year. The problem is real. College tuition costs are out of control. Average tuition rose 46 percent between 2002 and 2012, from $6,950 to $10,200.

Meanwhile, student borrowing grew from $53 billion in 2001 to $120 billion in 2012, with the overwhelming majority of that money coming from federal student assistance programs. Today, total student loan debt is around $1.3 trillion, according to the College Board.

More Pell Grant money, more federally backed student loans, various and sundry reforms — none of those solutions have checked costs. As a Clinton campaign staffer told a Politico reporter the other day, “We haven’t dealt with the crux of the problem: How do we actually stem the cost curve?”

The answer is emphatically not in the way Clinton suggests.

Particulars of the New College Compact are hard to come by; the Clinton campaign hasn’t released a complete plan, only a few fact sheets.

Some of what Clinton proposes isn’t original. President Obama in January announced ahead of his State of the Union address a “free” $60-billion community college plan that’s gone exactly nowhere.

Clinton talks at length about student accountability, college accountability and state accountability. Accountability is fine in theory; very few people think about what it means in practice. Think “No Child Left Behind for colleges” and try not to shudder.

No Child Left Behind sought to impose accountability by linking federal education funds to academic standards and performance. In practice, it led to a dumbing down of curriculum as teachers and administrators focused more on raising standardized test scores and fostered widespread corruption.

When Democrats still controlled Congress, several bills aimed to impose so-called gainful employment rules on for-profit colleges. The thinking was that many such schools were raking in tens of millions of dollars in federal student loan money each year while churning worthless diplomas. The proposed remedy was to require for-profit colleges to report how many of their graduates found full-time work within a certain period after graduation. If a school failed to meet the federally defined threshold, it would lose eligibility for government-backed student loans.

Clinton would build on the concept by requiring public colleges to pick up some of the cost of student-loan defaults.

“We will make sure colleges and universities have more skin in the game,” she said Monday, appropriating a line from Senator Lamar Alexander, R-Tenn., who makes a similar argument.  “If they load students up with debt for programs that don’t lead to good-paying jobs, students and taxpayers should not be the only ones left holding the bag.”

Again, that seems sensible. Why should taxpayers be on the hook for loans taken out by people with obviously worthless degrees? Now imagine the political battles that would ensue when university bureaucrats are under pressure to eliminate, say, Africana Studies or Queer Theory or even English Lit because graduates don’t “hit the metrics.” Administrators will want no part of that.

It doesn’t require much imagination to see that pumping an additional $35 billion a year into higher education wouldn’t stem the tuition cost curve — it would accelerate it.

Subsidies raise costs rather than lower them. A study published last month by the Federal Reserve Bank of New York lends considerable credence the idea of a “higher-ed bubble.” The authors found that “each additional Pell Grant dollar to an institution leads to a roughly 55 cent increase in sticker price tuition. For subsidized loans, we find a somewhat larger pass-through effect of about 70 percent.”

If the experience of the past half-century has taught us anything, it’s that greater federal oversight of education policy has terrible consequences. But we needn’t take such a long view when more recent history will suffice.

The Obama administration hasn’t shied away from using federal law and executive decree to compel colleges and universities to change how they handle claims of sexual assault on campus. It doesn’t seem to matter that the administration’s draconian remedy rests on a false premise and bogus statistics. The federal government has the power to call a lie a truth and force universities to comply.

College affordability schemes such as what Clinton, Obama and others propose also rest on a false premise; namely, that everybody should go to a four-year college or university and get a bachelor’s degree. It isn’t necessarily so.

Yes, numerous studies show that an individual’s lifetime earnings are appreciably higher if one has a four-year degree. But it’s also true, as economist Richard Vedder has pointed out (over and over again), that you don’t need a bachelor’s degree to be a welder, a master’s degree to be a machinist, or a Ph.D. to be a bartender. Nor should you have to go into deep debt for the privilege.

“Colleges have effectively confiscated federal loan and grant money designated for students and used it to help fund an academic arms race that has given us climbing walls, lazy rivers, and million-dollar university presidents,” Vedder wrote at National Review Online in April. But it’s also given us “declining literacy among college students and a massive mismatch between students’ labor-market expectations and the realities of the job market.”

The solution is not, as Clinton would have it, making a college education “loan-free” through a vast expansion of federal spending but rather to get the federal government out of the higher-ed subsidy business altogether.

Question of the Week   
Which one of the following was the first 20th century presidential candidate to call for a Presidential Debate?
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Quote of the Day   
 
"In nominating Barrett to the Supreme Court, [President Trump] kept his promise by choosing an undaunted originalist -- someone who interprets the Constitution based on the understanding held by its ratifiers.Trump's most profound effect on the Constitution will come when she and the other Trump Justices apply that originalism to the questions of liberty and equality."Read entire article here.…[more]
 
 
—John C. Yoo, Heller Professor Law at U.C. Berkeley School of Law
— John C. Yoo, Heller Professor Law at U.C. Berkeley School of Law
 
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