Category Archives: ethics

Price Fixing

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And this time it’s by the Republican caucus in the House. Among the moves they’re making in the reconciliation bill currently being debated in the various House committees is a badly needed move to reform the cost of college/university education and so improve the value of that education. The goal is to hold colleges accountable for student outcomes and curb the open-ended loan buffet.

The specific plan under consideration, though, is a terrible idea.

The House would reduce the aggregate limit for undergraduate loans to $50,000 from $57,500. The bill would also impose a $100,000 borrowing limit for master’s degree and doctoral programs and $150,000 for professional programs like law degrees. Graduate student loans are currently uncapped.

This is just price-fixing by another name, though, and worse than not addressing the underlying problem, it hides—like any price-fixing scheme does—the true costs and gains of the services being offered.

Better, and more efficient, would be to let free market forces solve the problem. I’ve offered this alternative before; it bears repeating, with a couple of additions.

• statutorily require colleges and universities to publish the average, median, and range of income at the five years employment mark for their graduates in each of the major fields offered
• [added] statutorily require colleges and universities to publish their graduates’ employment percentages at the five year post-graduation mark for each of the major fields’ graduates
• statutorily require student loans to be originated by private lenders or colleges and universities
• statutorily require colleges and universities to guarantee at least 50% of each loan granted their students [added:] by private lenders
• [added] bar any government or government-affiliated entity from guaranteeing any part of any student loan
• statutorily allow current and future student loans to be discharged in “ordinary” bankruptcy proceedings

With private lenders and colleges/universities having skin in this student loan game—and being the only players in the game—loans and their borrowers would be carefully screened for repayment risk. Just as importantly, prospective students and parents could better evaluate which majors to pursue and which schools best teach those majors. A happy side effect of that will be better use of us taxpayers’ money.

A Correct EO

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In early March, President Donald Trump (R) wrote an Executive Order that rescinded the security clearances of the law firm Perkins Coie and its lawyers individually. The EO also barred Perkins Coie from access to a number of Federal buildings and instructed other Executive Branch agencies to exam contracts with Perkins Coie with a view to ending them.

Last week DC District Judge Beryl Howell ruled the EO unconstitutional. Among other things,

Howell wrote that the text of the executive order, and Trump’s statements about it, made clear that he targeted Perkins Coie because it represented clients he doesn’t like, and clients challenging some of his actions.
“That is unconstitutional retaliation and viewpoint discrimination, plain and simple,” wrote the judge, an appointee of former President Barack Obama.

She’s not far wrong in that, and this is a case where Trump’s rhetoric contaminated the legitimacy of his move. Perkins Coie made an argument in its suit, though, that is and should have been so considered wholly irrelevant.

It told the court it was at risk of losing its most lucrative clients, as they frequently work with the federal government, and many are major government contractors. In fact, the firm told the court, it did lose clients.

That confers no obligation on the government to grant or continue security clearances to Perkins Coie or any other enterprise. No business must be allowed to arrange its business model in such a way as to compel our government to grant it a security clearance.

The President of the United States is the final arbiter of security clearances, of what is classified, and of who has declassification authority.

From that, this: a better—and entirely constitutional—Executive Order would require all Departments and agencies in the Executive Branch, including the President and his White House, that have security clearance authorities to rescind all security clearances of personnel who leave their Departments or agencies on the day of their departure—even if those employees are transferring to another Department or agency. The new Department or agency, and any nongovernment entity who employs the departed person, if they want the person to have a security clearance, must do a de novo background investigation before granting a clearance, and the Department, agency, or outside entity must justify the level of clearance requested.

The EO should do this, as well: recast security clearances, extant or newly granted, held by nongovernment enterprises and their employees as for the duration of the particular contract with automatic rescission on the end of the contract. New contracts must have de novo background investigations of all enterprises and individual employees contemplated for work on the contract. If an existing contract is extended for a second time, those security clearances must be explicitly renewed via de novo background investigations.

Security clearances give access to our nation’s most important secrets, and no person and no entity has an intrinsic right to one. No person and no entity has any sort of Constitutional right to a security clearance. Neither does our government have any obligation to grant a security clearance, of any level, to any person or entity. This fundamental concept is one that is too often unconsidered in disputes over clearances.

Demonstrating her Naked Bias

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Justice Ketanji Brown Jackson is at it again. At a recent “judges’ conference” in Puerto Rico, she said this about “relentless attacks” on judges “designed to intimidate:”

The attacks are not random. They seem designed to intimidate those of us who serve in this critical capacity. The threats and harassment are attacks on our democracy, on our system of government. And they ultimately risk undermining our Constitution and the rule of law.

So far, so good. She’s decrying attacks by the likes of then-Senate Majority Leader Chuck Schumer (D, NY) on two Supreme Court Justices he specifically named. She’s decrying the smear campaign against then-Supreme Court nominee Brett Kavanaugh.

Right?

No. She went on, speaking to judges, not those who threaten them:

I urge you to keep going, keep doing what is right for our country, and I do believe that history will vindicate your service[.]

There it is. Jackson has prejudged cases currently before activist (my term) district judges who’ve overstepped their roles and are looking to dictate foreign policy from their benches, presaging how she’ll rule when any of those cases come before the Supreme Court.

Another Alternative

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A letter writer in an earlier WSJ Letters section took issue with Allysia Finley’s op-ed in which Finley favored removing sugary foods from SNAP eligibility, characterizing Finley’s position with typical Leftist exaggeration:

[U]nder Ms Finley’s principle it would be appropriate for the government to withhold such benefits for given people unless they adhere to government diktats on such lifestyle choices as individual diets, exercise habits and so forth….

In Wednesday’s Letters section, another letter writer responded:

[T]hose who support taking sugary treats off the SNAP menu aren’t suggesting that the government monitor lifestyle choices—they’re simply encouraging the government to restrict harmful foods from the program. … Given that taxpayers are paying for that food, this would help fulfill the government’s fiduciary responsibility to manage taxpayers’ money wisely in another way: the policy would also minimize food-stamp recipients’ healthcare bills, for which taxpayers are also paying.

She’s absolutely right on this. There is, though, another alternative to the earlier letter writer’s exaggeration: if a citizen doesn’t want to have to adhere to government diktats, the citizen shouldn’t take the government’s schilling in the first place. This choice often involves hard, uncomfortable tradeoffs, but in the vast majority of cases, they’re entirely possible while in the medium- and longer-run being beneficial.

A Thought Experiment

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Our so-called “elite” universities are banding together to form a collective to resist the Trump administration’s efforts to withhold grants and contracts from those institutions that aren’t doing enough to combat antisemitic bigotry and support for terrorists, reporting what foreign money they’re receiving and in what amounts, and adequately limiting the numbers of foreign students and faculty to suit the administration.

The collective is centering its resistance on the premise that Government doesn’t get to dictate to them what their practices might be, never minding that all donors get to specify how their donations are used.

What this collective is missing is that colleges and universities have no particular right to government funds, and that government has no particular obligation to send money to colleges and universities.

Hence my thought experiment.

Consider that a large collection of private citizens get together and say to a college or university, “You can’t have any more of our money unless and until you stop doing these things and start doing these other things.”

What legal recourse would that college or university, or any collection of colleges and universities similarly addressed, have against that collection of private citizens? How is their private collective action any different from their collective action through their government? It is, after all, the same money, whether their private money given or withheld directly or their private money washed through government as tax remittances.