Tuesday, March 30, 2010

I've been known to complain...

I've been known to complain about Phi Beta Cons, the uninteresting National Review blog about higher education. I can easily imagine a place for a website filled with smart and well-informed conservative commentary on the academy, and I think it'd be a useful thing. But it would have to not consist of endless complaints about all forms of affirmative action save for alumni preferences and football admits; whines that Very Serious Studies by National Review freelancers aren't making it onto college curricula; jokes about political correctness that were the state of the comedic are in 1990 or so; and griping that the kids these days are having the sex.

There's lots of talk about the student-loan reform at PBC right now, little of it enlightening in the slightest. But at least it's not PBC, but rather The Corner, that came up with this gem. Republican Senator Lamar Alexander issues a bunch of dull talking points about the reform, and how it turns everything over to the government. He predicts that it will lead to something
more like a Soviet-style, European, and even Asian higher-education model where the government manages everything. In most of those countries, they’ve been falling over themselves to reject their state-controlled authoritarian universities, which are much worse than ours, and move toward the American model which emphasizes choice, competition, and peer-reviewed research. In that sense, we’re now stepping back from our choice-competition culture, which has given us not just some of the best universities in the world, but almost all of them.

So: "Soviet-style" is clearly in there for polemical value. But The Corner headlines the post "Alexander: Obama's 'Soviet-Style' Takeover of Student Loans." Alexander's comparing the predicted system of higher education to the Soviet system. But the headline makes "Soviet-style" into a description of the "takeover"-- i.e. a violent nationalization without compensation.

Notice that banks would be free to continue to make student loans. And they're not having their existing assets taken. All they're losing is the ability to make publicly subsidized student loans in the future. A comparison with Soviet nationalization is just nuts. And it's not even what Alexander said.

Anyway, the headline-post gap wasn't what first struck me about this. Neither was the surrender of National Review to being the microphone handed to current Republican office-holders. Rather, it was this:

Back in the days of the Savings and Loan crisis, and again in the days of Freddie Mac and Fannie Mae, we saw lots of commentary from the right that the problems couldn't be blamed on the free market. After all, in both cases massive moral hazard had been created by federal guarantees underwriting the debts, eliminating market discipline. Pains were taken to piously distinguish the free market from corporatism and corporate welfare (a distinction I take very seriously, I might add).

In the last two weeks, I haven't seen any Republican official or Republican-leaning intellectual make the slightest reference to the problems with a system in which private lenders make risk-free profits by lending on the back of a federal guarantee. The indictment of corporate welfare has been nowhere to be found. The view that there's something distinctively unproblematic about private lenders with public guarantees has been completely lost. And the (misleading) headline, the reference to a Soviet-style takeover, crystallized this for me. Since there's been no crisis in student lending, no collapse of the system, the status quo ante has been naturalized; there are people on the right who think that the subsidized revenue streams to which lenders had become accustomed were a kind of property that has now been seized. The ex post commentaries on FSLIC and Franny and Freddie have been forgotten.

Update I missed this post from the estimable and independent-minded Reihan Salam.


Anonymous said...

"The view that there's something distinctively unproblematic about private lenders with public guarantees has been completely lost."

Do you mean "distinctively problematic"?

Jacob T. Levy said...

Yes; thanks for the correction.

Todd Seavey said...

I have nothing to add to the most substantive bit here, about student loans, but I will say that I initially thought PBC tolerable when I skimmed it a few times -- but that's because I assumed it was written by typical conservative students. Apparently, it's professors, which makes it far less impressive, to put it mildly. And, yes, though you refrained from saying it, the TNR one was better.

Sidenote: the word verification random-word I'm being asked to type in order to post this is "conspot," which wouldn't be a bad blog name itself. Coincidence?

Anonymous said...

Jacob, the WSJ's lead editorial today was on this subject.

There's an implicit suggestion that if the right were truly opposed to Fannie and Freddie, they should want the government to take over the business of mortgage lending. One can think Fannie and Freddie and Sallie are all abominations in some sense, and still preferable to certain alternatives.

Anonymous said...

veil, veil, veil.

The people demand that the Multicultural expert in Montreal weigh in.

Anonymous said...

The reason why "the view that there's something distinctively [un]problematic about private lenders with public guarantees has been completely lost" is because when it comes to student loans, that battle was lost many years ago. If you are upset about a current policy, it does little good to complain about decisions from years ago. Yes, the blog post had a sensationalistic title and failed to fully address all aspects of the issue, but that is the nature of blog posts.

jimjoyce25 said...

I came across an old blog of yours regarding the difference between political theory and political philosophy, which I enjoyed.

I've studied both, though it's been over 20 years since I was last engaged. I'd venture to describe the difference as follows:

Political philosophy tends to start with a moral theory about what's good or right and derives its conclusions from that theory. It's usually all about ought. Considerations of political power are derivative.

Political theorists tend to start with the problematic of political power. Moral issues are usually subsidiary.

Institutionally, the difference can perhaps be illustrated by a little story.

I was a graduate student in philosophy for a short time at Harvard in the early 1980s. Burton Dreben asked me one day what classes I was taking. They included a political theory seminar with Judith Shklar. His response: "That's not philosophy!"

I'd bet things haven't changed all that much in the meantime.