Relevant and even prescient commentary on news, politics and the economy.

African Americans, the Poor in Court and Sentencing Reform

As one person I read consistently would say upon discovery of something quite obvious; “Quelle Surprise.”

I was told if I saw a prisoner, a parolee, or an Ex with a tattoo of the number “13-1/2” on their arm, it meant 1 judge, 12 jurors, and 1/2 of a chance. 1/2 of a chance to win in court as the cards were stacked against those who could not afford adequate representation or were African American. For sure if you went to trial, the resulting sentencing would be harsher as you made them work rather than accept the offered plea bargain.

Part of the sentencing reform as proposed by Congress, backed by the Koch Bros, and supported by CAP as well as other progressive orgs. is meant to prevent the Koch Bros. associates and white collar business types from going to prison when they break the law. As to be expected, the Koch Bros. could care less about minorities and the people lacking economic means to fight back in court to prevent going to prison. Mind you now, those minorities and people of little means would still benefit from an early release; however, the effort by the Koch Bros., CAP, etc. does nothing to prevent them from going to prison in the first place.

I had previously warned on another site the effort to revise sentencing guidelines is flawed as it failed to address the upfront justice system as I explain here;

Sorry Ed, Keith, and Nancy:

The issue was always in the courts and how defendants are represented and what avenues they had available to them once and if they were convicted and sentenced. The resources are not there, they are over burdened, and they are understaffed. Defendants do not raise much of a fight in the courtroom as they lack the resource to do so. Today, plea bargaining rules the courtroom and 85%+ of all cases before a judge are plea bargained away with many defendants even signing away their rights to appeal for a period of time. It is a matter of expediency as counties and states do not want to fund the courts and defendants can be moved through the system speedily to the prisons. Besides prisons being in unlikely places away from the crowds, they are an economic incentive as they employ people and raise tax revenue in areas not populated by business.

What is happening in states and in Congress is akin to giving a person with pneumonia an aspirin and telling them they are cured. For all that is said, talked and written about for criminal justice reform, it is a just bromide to the true issues. Besides have any of you looked at the tenets of parole?

Tethering in one state costs $13 per day for the parolee just released from prison and to which there is no escape. At the end of a 2 year parole, the parolee owes a state ~$9,490 if they do not pay it as they go along (mind you they may not have a job in this economic environment). If you do not complete paying for it, you are kept on parole until it is paid. If you refuse to pay it, you go back to prison. States use these funds to finance other state costs besides just keeping tabs on the parolee.

In most states, the Parole Officer judgment is the same as a court’s decision. A prison psychiatrist can decide a parolee needs no additional counseling only to be overruled by the Parole Officer. The length of the counseling is set by them also as they all have their medical degrees(?). The parolee pays for this also. If the parolee fails the course, the course can be extended or they can go back to prison. So much for the issue of recidivism.

Today, the Washington Monthly admitted they were taken in by the efforts of the Koch Brothers. The Koch Brothers have no interest in justice for all as the administration found out and the Washington Monthly (and I assume the CAP) also found out.

“One of those bills – which has been supported by Koch Industries, libertarians and business groups – would make wholesale changes to certain federal criminal laws, requiring prosecutors to prove that suspects “knew, or had reason to believe, the conduct was unlawful,” and did not simply unknowingly violate the law.

Many laws already carry such a requirement — known as “mens rea” – but Congress left it out of many others, and libertarian groups say that has made it too easy to unknowingly violate obscure laws. Some environmentalists argue, however, that the real motive of Charles Koch, the philanthropist and the company chairman, in supporting the legislation is to block federal regulators from pursuing potential criminal actions against his family’s network of industrial and energy companies, a charge the company denies.”

Why would the Koch Brothers be interested in such a change? It appears “‘Koch Petroleum Group knowingly and voluntarily pleaded guilty to criminal violations of the Clean Air Act and to making false statements,’ the DOJ spokesman, Wyn Hornbuckle, said. ‘These admissions and the significant criminal liability in this matter speak for themselves.'”

Is ignorance of the law an excuse for having committed a felony? It sure does not work when caught speeding (misdemeanor) . . . “well officer, I did not see the speed limit sign,” nor does it work when a person lacks cognizance when committing a crime as witnessed by the numbers of mentally ill locked away in prisons. One recent case has arisen where a 21 year old with the capacity of a seven year old is being charged after tweeting threats to schools. Reading the comments of people who know him, it does not appear he might have an evil intent or mind. The difference between the two being, those who are capable in making cognizant decisions and those being incapable of doing so (Bev Jack?). Even though it is not fool proof and when there is a question of ignorance of the law, it is time to ask for a jury trial. In which case, one can test the law by asking the question, “what would a reasonable man expect and do?”

This really is not the question in that there are those who have better standing in court than the average or less than average citizen due to the availability of resource. Those who have better resource and as a result better standing in court no longer want to make their case and be given a pass. November 24 in a NYT article “Rare White House Accord With Koch Brothers on Sentencing Frays”. Why would this be? It appears H.R. 4002 sponsored by “Wisconsin Republican Jim Sensenbrenner has made it complicated for House Democrats who have been warned (by Republicans) the passage of H.R. 4002 would be essential for obtaining support from Republicans for a larger package of criminal justice bills.” What does this bill do?

In effect it gives businesses a get out of jail free card; “would make wholesale changes to certain federal criminal laws, requiring prosecutors to prove that suspects ‘knew, or had reason to believe, the conduct was unlawful,’ and did not simply unknowingly violate the law.”

Many laws already contain such language which causes the court to prove the defendant knowingly violated the law (except in the case of insanity where the burden of proof is with the defendant). As DOJ spokesman Melanie Newman stated: “Countless defendants who caused harm would escape criminal liability by arguing that they did not know their conduct was illegal.” Those who suffer from mental illness have to prove they lacked an evil mindset and those who do not declare mental illness, do not have such a burden. The potential impact is many more of those could cause potential harm to the environment and walk free. The mentally ill (favored scapegoat of the NRA and weapons promoters these days) are held to a higher standard.

“The proposed standard, Justice Department officials said, might have prevented guilty pleas in a variety of cases, such as the charges filed in 2013 against Jensen Farms of Colorado for failing to adequately clean cantaloupe, resulting in an outbreak of food-borne illness that was cited as a factor in at least 33 deaths. It also might have prevented the plea in the 2012 charges against the owner of a pharmacy who sold mislabeled, super-potent painkillers blamed in three deaths.” The same holds true for “a compounding drug company prepared drugs for injection which resulted in a total of 25 deaths and injury in Michigan and other states.

Even so, some liberal representatives still support the legislation which may result from the passage of H.R 4002 even though it does little to provide the necessary representation in court for minorities and others to get a fair trial without plea bargaining. In a statement on Tuesday (November), Michigan Representative John Conyers said “he supported the bill which the Judiciary Committee approved by voice vote last week because outside parties had raised ‘a number of concerns about inadequate, and sometimes completely absent, intent requirements for federal criminal offenses.’” Seriously, Representative John Conyers? Where is the concern for your constituents who face the courts on a daily basis with nothing to defend themselves other than plea-bargains and the grace of the court (if such exists). The present legislation is little more than a back door correction of what happens and should not have happened in the first place during court proceeding.

Critics have said those who oppose the change due to the Sensenbrenner addition are exaggerating the impact of it as it is only a small portion of the entire bill focusing on eliminating mandatory sentencing. The elimination of mandatory sentencing will not stop a judge from applying a harsh sentence forcing a defendant to apply to a COA to overturn the judge and costing $thousands more. It is true a reduction in sentencing will help the overall issue of too many in prison; but, this solution is only a part of the problem. Most of the issue is on the front end of the justice system in the US. The lack of adequate representation, the under-staffing of public defender offices, the cutting of funds for public defenders, the over use of plea bargaining to short circuit the justice system, the burdens on courts, etc. The poor and minorities deserve the same representation and access to justice as what the associates of the Koch Bros. industries receive in court. This is a far bigger problem and sends many more people to prison than does drug sentencing which could be mitigated if better representation existed. It is here Congress, Conyers, CAP and all the progressive orgs should spend their money and energy. Otherwise much of the effort will not yield the payoff in preventing people from going to prison as expected.

12 Jurors, 1 judge, and 1/2 of a chance.

My $.02 . . .


A Study In Contrasts Nancy LeTourneau; Washington Monthly
Criminal Justice Reform: It Depends Upon Where You Look; Ed Kilgore; Washington Monthly
Quick Takes – my answer to Washington Monthly; Nancy LeTourneau; Washington Monthly
Rare White House Accord With Koch Brothers on Sentencing Frays; Matt Apuzzo and Eric Lipton; NYT

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For Profit College, Student Loan Default, and the Economic Impact of Student Loans

For Profit Goes on Probation

The University of Phoenix has been placed on probation by the Department of Defense preventing the university from recruiting on military bases. The probation comes after the Federal Trade Commission and the California Attorney General’s investigation into the University of Phoenix recruiting methods, its high costs, and the resulting poor student performance.

This is not the first time Phoenix-U has been in trouble. In 2013 the University of Phoenix was threatened with probation by the accreditation board for a lack of “‘autonomy’ from its corporate parent -– a development that prevented the university from achieving its ‘mission and successful operation.'” In other words, the for-profit university #1 priority by its owners was to turn a profit at the expense of teaching, retaining, and graduating its students. This is precisely what I had alluded to previously on higher rates of defaults.

Student Loan Defaults

An interesting analysis by the NY Fed suggests students with lower amounts of student loan debt are more likely to default than those students with higher amounts. This is a new take on student loan debt and associated default as it was always thought the higher the debt the greater risk of default. Student Loan Debt has increased as more attend college, costs to attain an undergraduate degree have increased, even higher costs are sustained for Masters and Doctorate degrees, and students have been staying in school longer. Coming out of college the study finds amongst students loan debt is distributed rather evenly over time with one third being held by those in the 20s, one third held by those in the thirties, and one third held by those forty years of age and older. A large percentage of those borrowers or ~39% of them have loans of less than $10,000 and it is the holders of debt who have been defaulting at a higher percentage. The study goes on to break it down as to why they might be defaulting more frequently than tose with higher amounts of debt.

Using Equifax credit data, the NY Fed broke down the data into loan origination cohorts of student loan borrowers and using the same Equifax data, developed default rates for each cohort. Taking the origination date information for each academic year, the Fed was able to assign borrowers to loan-origination-completion-cohorts. The analysis did not reveal dropout or graduation information; however by using loan origination data, the methodology used does approximate whether students left school finished their education or just left school.

invisible hand

As shown on the graph and nine years out for the 2005 and the 2007 cohorts 24% of the students and greater had defaulted on their student loans by the 4th quarter of 2014. While the data for the 2009 cohort is incomplete and depicts five years as opposed to nine years, the data depicts a worsening default rate at 5 years then what can be found with the 2005 and 2007 cohorts at 9 years. Typically what we read and hear about is a 3-year window as reported by the Department of Education and is discussed by the news media. The 3-year window default rate is much less for each of the cohorts with the 2005 cohort being ~1/2 or 13% of what it is in 2014 as shown by the Fed study.

As I mentioned above, a large percentage of those who defaulted had student loan debt of less than $10,000. 34% of those borrowers in that group who defaulted on their student loans had balances of less than $5,000. 21% of the 2009 cohort were in this category of < $5,000 in student loans five years out which depicts a worsening trend when compared. A closer examination of the 34% also reveals this group to be made up of students who attended community college, did not finish, perhaps discovered this is not what they wanted to do, or the curriculum did not fit their needs. What the NY Fed concludes is the default rate worsens when a much longer period of time is taken into consideration as opposed to the 3 year window the Department of Education looks at and which the public hears about in the news. The longer the period, the higher the default and it continues through years 4 through nine for the first two cohorts. As shown the default rate for the 2009 cohort is already higher. Those who had lower amounts of student debt in the end may have defaulted due to a worsening economy or potentially did not get the payback expected from a two year degree at a community college or for-profit school. The study also revealed those who are current today with their student loans did experience stress in making payments and 63% of those student loan borrowers appear to have avoided delinquency and default over the last decade. On the other side of the coin, student loan borrowers with $100,000 of debt had a default rate of 18% which has been attributed to their being higher earners after graduation.

Economic Impact of Student Loan Debt

invisible hand

One aspect of the fall-out resulting from increased student loan debt as suggested by the Fed study is decreased home ownership. From 2008 onward the study depicts a steady decrease in the numbers of graduates burdened by student loans investing in homes. Dropping from a high of ~34% in 2008, the percentage of homeowners and having student loan debt has declined to ~23% in 2014. What has occurred, those 27-30 year old having no student loan debt have surpassed those with student loan debt in home ownership. While both groups experienced a decrease in home ownership during bad economic times, the decrease for those having student loans was far more severe. The decrease in home ownership still continues for both groups with those having less debt owning homes at a higher level.

invisible hand

A similar situation holds true for new auto ownership. The numbers of 25-year old college graduates purchasing automobiles and with student loan debt retreated from the market place at a faster pace than those without student loan debt. It is only recently have increased numbers of both groups returned to the market place to buy automobiles. While the purchase of automobiles has increased for all 25 year old people, the numbers of college grads with student loan debt no longer surpass those without student loan debt and at best are at the same level as those without student loan debt. Student loan debt is a burden and more of a burden in harsher economic times.

Much of the retreat from the market place is due to large loan and higher interest rates on undergraduate student loans, even higher interest rates and balances on graduate and doctorate student loans, higher balances due to the increased costs of colleges across the board, and longevity in paying back student loans. There are no controls on colleges and universities to rein in costs and it is the only cost to increase at a faster rate than healthcare. The higher costs play out in student loan debt as states do not subsidize colleges to the same ratio as they did 20 years ago, Pell Grants have not kept up with the costs of colleges, and parents can not afford the increased cost out of pocket either.

For the purchases of homes, cars, appliances; the bank assesses your ability to repay the loan as these loans can be discharged in bankruptcy unlike student loans which can not be discharged. Many college graduate households today consist of two married adults both of which are burdened with having student loans to pay off making the situation even more precarious. The result is increased risk.

invisible handUsing the same data, the NY Fed reviewed the risk rates of 25 and 30 year olds with and without student loan debt. As can be expected, those households with student loan debt were deemed a higher risk due to student loan balances and higher interest rates and a decrease of potential income over time. Those students would be less likely to obtain a loan or a loan with lower interest rates. A higher interest rate adds to an already high financial burden.

There are probably many other reasons why young households may have retreated from the market place; cultural changes in how younger households view home ownership, automobiles, and other purchases; higher costs of financing; lowered expectations of future earnings; unwillingness to take on more debt, etc. The fact of the matter is, not only does the market place view them as a higher risk; but, these college-educated young buyers are not buying homes, autos, etc. or making large investments at the same level that once existed and it does not bode well for the economy.

It also never ceases to amaze me the number of anti-educational opinions which flare up when the discussion of student loan default arises. There are always those who will prophesize there is no need to attain a higher level of education as anyone could be something else and be successful and not require a higher level of education. Or they come forth with the explanation on how young 18 year-olds and those already struggling should be able to ascertain the risk of higher debt when the cards are already stacked against them legally. In any case during a poor economy, those with more education appear to be employed at a higher rate than those with less education. The issue for those pursuing an education is the ever increasing burden and danger of student loans and associated interest rates which prevent younger people from moving into the economy successfully after graduation, the failure of the government to support higher education and protect students from for-profit fraud, the increased risk of default and becoming indentured to the government, and the increased cost of an education which has surpassed healthcare in rising costs.

There does not appear to be much movement on the part of Congress to reconcile the issues in favor of students as opposed to the non-profit and for profit institutes.

The Race Between Education and Technology

Just Released: Young Student Loan Borrowers Remained on the Sidelines of the Housing Market in 2013

University of Phoenix Accreditation Hits Snag As Panel Recommends Probation

For-profit college banned from recruiting military students

The Student Loan Landscape

Looking at Student Loan Defaults through a Larger Window

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More Shopping Around . . .

I want to stress the need to shop around when looking for healthcare insurance on the exchanges by citing one example of how it can make a difference. As mentioned earlier here and on Charles Gaba’s ACA Signups blog, Shopping Around does make a difference. If you did not do so, you could be suckered into paying far more than what is necessary for healthcare insurance. This is supposedly the impact of the free market and as there is a sucker born every minute, there are those who will invest the time to look for and find the best policy at the best price. The market is not static.

I pulled another example of how the market can vary by going from a state to state view to looking within one particular state. In particular, I chose Missouri as an example to portray as it is showing an advertised high increase of cost at 27 and 22%. Charles Gaba does an excellent job of explaining the impact of these two increases within Missouri, which I will portray at AB. Charles Gaba fills the gap which Healthcare.Gov does not fill by pointing out the number of policies which have lower rates of increase than 10% (Healthcare.Gov only mentions increases >10%).

invisible hand

As you read the top half of the chart (click on the chart for a larger chart), you can see Coventry Health and Life appears to dominate the market place with >80% market share. If we look at the number of participants in the market, Coventry is only being measured against 48% of the market place. The other half of the market place which is reporting less-than a 10% rate hike is not reported by Healthcare.Gov. It is there, Healthcare.Gov does the consumer a great disservice by not reporting market place increases less-than 10%; the PPACA a disservice as it creates only a picture of out-of-control increases; and a disservice by feeding the naysayers with data of >10% increases only. While the PPACA is not perfect, it is certainly a step in the right direction as we waited ~22 years since Hillarycare for the healthcare industry and the Republicans/Congress to bring something to the table.

The bottom half of Charles Gaba’s chart depicts what could be happening using an estimated increase of 9.9% with the other healthcare insurance companies. If Charles is to be wrong in his calculations, he has erred to the high side of a potential increase by them. The total increase for the state is not 33% or 42% as reported in the news media. Nor is it 21% using a weighted average calculation as Charles Gaba determines. It is an ~ 15% total increase (Charles Gaba calculated) as determined by a high estimate of what is being paid by >50% of the market place insured participants. Could the state’s 15% be decreased? Yes, if more people shopped around in the lower half of cost in the market place.

Is this a failure of the market place, a failure of people not to “Shop Around,” or a failure of Healthcare.Gov to advertise low increases by not reporting on those lower-than 10%? Some of each I suspect; but, do not expect the healthcare insurance companies to come to your door and tell you they are going to gouge you this year as they will not. Maybe Healthcare.Gov should report on the low increase companies and maybe people should spend more time looking for a low cost and better policy . . . the same amount of time they will spend investigating an automobile and looking for the lowest cost than what they will for something impacting their health. After all, which is more valuable?

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Right Wing Slant to Non-Partisan Progressive Think Tanks

With the Koch Brothers donating to Center for American Progress and funding studies on Incarceration, one might wonder what changes might occur at CAP due to the financial support of studies by the Koch Brothers. CAP is not the only one to begin to solicit or accept funding from major corporations or interests. Brookings has also been soliciting funding for its research.

Corporations made up 25% of Brookings’s donors giving at least $50,000 in 2013, up from 7 percent in 2003, the analysis found. The proportion of donors at that level coming from overseas, including foreign governments and trade associations, rose from 6 percent to 22 percent in that period. Separately, the analysis showed a substantial increase over that time in the percentage of gifts that came from corporate and foreign donors.” The increase comes as corporate interests look for other ways to influence Washington beyond traditional lobbying efforts.

A recent Brookings study released in June analyzed Federal Reserve Board data that tracks student debt and income levels in young households and concluded typical student borrowers were no worse off now than they were a decade ago and reports of a student debt crisis may be overblown. The study contradicted arguments from critics of the for-profit student-loan industry and Sen. Elizabeth Warren (D-Mass.), who has pushed for federal relief of a debt burden that she has said “crushes ­ millions of young people and has started to weigh down the entire economy.”

Federal Reserve Chair Janet L. Yellen later cited the same database reaching an entirely different conclusion. In an October speech, Yellen warned of the “dramatic increase” in debt for students and in particular for low-income families further warning of “the large and growing burden” of student debt on its owners and its impact on the future economy.

Matthew Chingos a researcher for Brookings called Senator Warren’s proposals of lower interest rates poorly thought out and not as progressive as they may seem. Going back to the same ‘fair market value” analysis Jason Delisle of the New America Foundation advocates, Matt suggests today’s interest rates do not reflect administrative costs and default rates. He conveniently ignores the inability to discharge student loans in bankruptcy and the collection of debt afterwards which exceeds that of dischargeable loans. Another Brookings Associate Beth Akers has claimed student loan interest rates on student loans do not really much of an impact on cost ignoring the overall student loan cost in comparison to short-term costs. Silly me, I should take a fifteen year a $100,000 8% mortgage as opposed to a 6% mortgage loan as my payments will not matter? Many student loans are 10 or more years in length, graduate and doctorate loans do exceed $100,000, and while undergrad loans may be less; the overall cost does matter in relation to the accumulation of wealth for young people.

Michael Simkovic, a visiting associate professor of law at the University of North Carolina at Chapel Hill and an expert on lending issues, said that if Brookings’s reports on student debt were to dictate policy, they would “boost the profits of the student lenders like Sallie Mae.” In other words, the Brookings study favors a positive business policy over that of advancing a student prospects and whose growth in wealth and income will spur greater economic growth over the long term. With this outlook, Brookings gives the appearance of shifting to the right in politics.

The closeness of this new approach with corporate funding gives the appearance of ties between Brookings and the student loan lending industry. While Brooking denies being influenced, there appears to be similar ones between Chingos, Akers, and Delisle with business promoting their interests also. Created in 2000, Lumina Foundation came into being when USA the largest administrator of student loans sold its assets to Sallie Mae. Since 2009, Lumina has donated $1.9 million to Brookings. The donation figure was tabulated by the Foundation Center, a research group that tracks philanthropic giving. Matt Chingos states Lumina did not underwrite his June study; but, at the same time, Lumina has directed $hundreds of thousands in both his and Akers direction since 2011.

Three former Sallie Mae board members sit as directors of Lumina. Lumina states unequivocally in this David Dayen article it has no ties to the student loan industry and it is an “independent and nonpartisan organization.” Interestingly, Lumina has shown up on other articles on student loans as well as the one cited to refute any impact it may have. To my point though, corporate interests are having more impact on once nonpartisan studies just by the nature of their donations as more think tanks are looking for funding and corporate interests are looking for other ways to impact Washington. Going forward, nonpartisan think tanks such Brookings lend their past credentials to the results of today’s studies which are indirectly and directly funded by corporate interests.

In the end, the directors at Brookings, Lumina, and the study’s authors have taken an arm’s length stance on the impact of the donations to Brookings and the results of the studies. So one could conclude, nothing has changed over the last decade or so with Brookings and we have nothing to worry about as corporations support independent study at nonpartisan think tanks?

Senator Elizabeth Warren declined to comment on the Brookings reports, but she called for greater transparency so the public can assess the “independence, or lack of independence, of the research from think tanks.” Maybe Senator Warren has a point? This is first time I have seen a Brookings study use terminology such as “cheap political gimmick” and “embarrassingly bad proposal” and potentially may be the beginning of political sway in the study and no longer presenting “just the facts mam.” If anything Warren’s proposal of reducing student loans to what the Fed uses for a discount rate is a proposal too late and should have come years earlier as we would have been graduating a cohort of students who would have benefited from much lower rates. Who is embarrassingly naive now?

This causes me to come back to my original point; “With the Koch Brothers donating to Center for American Progress and funding studies on Incarceration, one might wonder what changes might occur at CAP due to the Koch’s financial support of future studies.” Having watched what is occurring at Brookings, one might expect a different direction taken by CAP.

The New Republic takes issue with the direction of the Koch Brothers and the Center for American Progress study on incarceration;

“The consensus may be bipartisan, but it’s not ideologically balanced. The language advocates use to describe the problems at hand and the nature of their proposed policy solutions demonstrate that this moment is far more concerned with mass than incarceration. Despite reports of meeting in the middle, we’re witnessing a liberal acquiescence: Nearly everything is phrased in conservative terms — cutting costs, saving funds, and minimizing the size of the system.”

There is more to the issue of prisons than just head count and hidden within the parole, local, state, and federal justice/prison systems. Sentencing guidelines, parole board rules (which grant the boards court-like powers), the public defender system (vastly underfunded and under manned), the 1996 AEDPA (which disallows federal courts from ruling on state decisions in criminal cases), etc. are some of the issues needing to be addressed. Rather than concern over these issues and the impact upon people going to trial, conservatives or “being right on crime” are now concerned about the impact on taxpayers. More on this in another post.

In an earlier post, I had written about Alan Collinge going to Washington DC to protest CAP’s apparent change of direction with student loans.

CAP’s “How Qualified Student Loans Could Protect Borrowers and Taxpayers” proposes returning bankruptcy protections to student loans. Examining the plan reveals this program would “allow student loan borrowers to refinance their loans at current rates (about 4.5 percent for undergraduate loans, 6.4 percent for graduate loans). While this could mean a significant interest reduction for private loan holders, it would likely translate into only a couple of percent reduction for federal loans, which comprise the lion’s share of all outstanding loans. There is also a .5 percent fee that would be slapped onto the principle of the new, refinanced loan, making the plan even less attractive. This plan, furthermore, would not be available to the most distressed borrowers, those in default whose loans have exploded with penalties and fees.

There are some hidden consequences as well. For private loan holders, the federalization of their loans – and let’s be honest, this really is a federalization plan rather than a refinancing plan- will cause them to lose vital consumer protections like statutes of limitations and Fair Debt Collection Practices rules (Don’t believe the rhetoric about federal loans having more consumer protections than private loans – this is completely false). This could be a huge negative for these borrowers.”

Instead what is seen are alternatives to bankruptcy such as gainful employment, income based payment, service loan forgiveness, payment on time, interest reductions, etc. in most plans are teasers with only a low percentage of applicants being accepted and successful. CAP and other advocates push for these repayment programs which in the end result in the majority of people who try for the benefit being kicked out before anything is forgiven. CAP has recruited a former director of the Department of Education lending program David Bergeron who does not appear to have brought anything new to the discussion other than repayment programs which may cause more damage in the end. The issue still remains of bankruptcy protection in the form given to big business and TBTF by Congress and in the end walked away from $billions in responsibility over the decades. Guess students do not get a benefit of the doubt.

Nonperforming loans would be included in this plan also as a bailout and makes the government a private industry bill collector for loans which more than likely should not have been made. The impact of this plan would help a few borrowers and in the end may hurt them as they lose protection under the statutes of limitations.

The same as Brookings, the Center for American Progress in alliance with conservative groups is voicing a message more to the right in politics than progressive.

1. “Elizabeth Warren faces right-wing stooge: Here’s who’s quietly funding her top critic” David Dayen, “Salon”
2. “At fast-growing Brookings, donors may have an impact on research agenda” Tom Hamburger and Alexander Becker, “The Washington Post”
3. “Obama’s Student-Debt Fix Isn’t Much Better than the GOP’s” Nora Caplan-Bricker, “New Republic”
4. “You Can’t Reform the Criminal Justice System by Cutting Costs” Stephen Lurie, “New Republic”
5. Student loan refinancing Alan Collinge, “The Hill”

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Listen to Michigan Congressman Sander Levin Tongue – Lash Wisconsin Congressman and Chairman Paul Ryan

Michigan is pitifully gerrymandered due to state Republicans controlling the state legislature in 1990, 2000, and 2010 and controlling redistricting. Michigan sends fewer Democrats to The House than how the state votes which is 54+% Democrat in national elections. Democrat Congressman Sander Levin is one of those Congressmen. Listen to his response to Republican Congressman Paul Ryan, Chairman House Ways and Means Committee during another unscheduled committee meaning.

“So whatever the Supreme Court decides later this month,” Paul Ryan said. “I think the lesson is absolutely clear. Obamacare is just flat busted. It just doesn’t work. And no fix can change that fact.”

Sanders: “What’s busted is not ACA But your attacks on it, endless attacks.”Sander Levin said calmly and deliberately. “Never coming up with a single comprehensive alternative all these year. So you sit as armchair critics while millions of people have insurance who never had it before. Millions of kids have insurance who would not otherwise have had it. People who have pre-existing conditions no longer are cancelled or can’t even get insurance. The donut hole is gone. Millions of people in lower income categories are now insured through Medicaid, millions and millions and millions. Cost containment is beginning to work. The increase in cost net rate is going down. And so you are livid because it is getting better. That’s why you are livid. … And the states that are denying their citizens further coverage under Medicaid, are essentially telling people, well get lost when it comes to healthcare. .. And you have a governor Mr. Chairman, who is running around this country talking about the evils of healthcare when millions of people are benefiting from what happened. … Your frustration is millions and millions and millions of people are benefiting, have healthcare when they did not before.

Paul Ryan covering up the truth.

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We Believe ? ? ?

Almost one year old (July 18, 2014) this speech by Senator Elizabeth Warren. We Believe:

– “We believe that Wall Street needs stronger rules and tougher enforcement, and we’re willing to fight for it.”

– “We believe in science, and that means that we have a responsibility to protect this Earth.”

– “We believe that the Internet shouldn’t be rigged to benefit big corporations, and that means real net neutrality.”

– “We believe that no one should work full-time and still live in poverty, and that means raising the minimum wage.”

– “We believe that fast-food workers deserve a livable wage, and that means that when they take to the picket line, we are proud to fight alongside them.”

– “We believe that students are entitled to get an education without being crushed by debt.”

– “We believe that after a lifetime of work, people are entitled to retire with dignity, and that means protecting Social Security, Medicare, and pensions.”

– “We believe—I can’t believe I have to say this in 2014—we believe in equal pay for equal work.”

– “We believe that equal means equal, and that’s true in marriage, it’s true in the workplace, it’s true in all of America.”

– “We believe that immigration has made this country strong and vibrant, and that means reform.”

– “And we believe that corporations are not people, that women have a right to their bodies. We will overturn Hobby Lobby and we will fight for it. We will fight for it!”

Reference: Elizabeth Warren’s 11 Commandments of Progressivism

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Picking Up The Tab for Full Service Restaurants

In the news, great attention has been paid to the activities of fast food workers striking to increase their salary up from minimum wage, their plight with fast food restaurants, and their heavy reliance on public assistance to get-by. Included with fast restaurant workers whose employers are represented by the National Restaurant Association are full service restaurant workers who make up the bulk of the worker in the restaurant industry. The plight of full service restaurant workers is documented in an article by Sarah Anderson at IPS.

Of the 4 million people working in the restaurant industry, 50% rely on public assistance to get by at a cost of $9.5 billion. This rivals WalMart and other low wage retailers who also depend on public assistance and communities for their employees. While restaurants like Papa John’s complain about having to pick up the tab for healthcare insurance or having to raise prices 10 cents for a medium pizza, they fail to mention taxpayers are paying the hidden cost to their low wages. 8 of the 10 lowest paid jobs are represented by restaurant workers of which 5 are in the full service restaurant segment.

To supplement underpaid restaurant workers (which also subsidizes their employers) and is paid by taxpayers are public assistance programs such as Medicaid and CHIP health Insurance programs, the federal earned income tax credit (EITC), food stamps (SNAP), basic household income assistance (TANF), the national school lunch program, childcare assistance, low income home energy assistance program, section 8 housing, and housing choice vouchers. What has not been mentioned is a second form of subsidy to full service restaurants through the sub minimum wage, which also requires customers to pay these workers’ wages directly through tips.

The industry is not being decimated by rising costs, employment is expected to grow 10% by 2022 suggesting greater industry growth and translating into higher public assistance costs and less labor productivity. “Full-service restaurant workers are at the core of America’s growing low-wage economy; many of these workers’ earnings are far below what’s needed to meet their subsistence needs.” Greater than 21 percent of all tipped workers live in poverty representing 2.5 times the overall work force in poverty. At a cost of $9.5 billion to subsidize the industry, it may be worthwhile for taxpayers to decide whether to pay the money upfront rather than through government programs.

invisible hand Table 1 represents the five biggest players in the Full Service Restaurant business segment and the annual cost of public assistance subsidies. Along with Olive Garden, Darden owns six smaller chains: LongHorn Steakhouse, Capital Grille, Bahama Breeze, Seasons 52, Eddie V’s and Yard House. Darden employs 150,000 employees with over 1500 locations and serves 320 million meals annually. DineEquity is better known as IHOP and owns the Applebys chain. With nearly 3600 locations it is bigger than Darden; but, most of the restaurants are franchises. Brinker International is the parent company of the Chili’s as well as the smaller Maggiano’s Little Italy chain. By its name, you may recognize Bloomin Brands as the owner of Outback Steakhouse. Add to this, Carraba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse and Wine Bar. If you have not passed a Cracker Barrel in the southeast or while traveling south; then, your eyes have not been open. These companies are heavily subsidized through public assistance.

Are you going to end up paying more for a nice meal at many of these restaurants, the answer is yes you will. The cost of which will transition from the rear door where it is hidden and to which you are paying it anyways after being handled multiple times to the front door and “potentially” going directly to the restaurant worker serving you. Either you believe in a fair wage for a fair day’s work or you believe in keeping an underground of subsistence existence financed by you in the end and continued subsidizing of companies. It is appropriate to eliminate the tipped sub-minimum wage and raise the minimum wage. This is something ALEC the mouth piece for the National Restaurant Association and state governments have been fighting. A particular emphasis should be placed on raising wages at companies which use public assistance to supplement payroll wages. Continue to provide support programs for minimum wage workers. Actively encourage collective bargaining by restaurant workers as a buttress against large companies which today have legislature and private organizations such as ALEC at their backs. With the renewed emphasis, it is only then can Labor begin to reap some of the productivity gains denied them.

Other References: Picking Up The NRA’s Tab; The Public Cost of Low Wages In the Full Service Restaurant Industry

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New America Foundation: Let the Sins of Grad PLUS Loans Be Visited Upon IBR


I ran across Matt Leichter and the Law School Tuition Bubble blog while doing some research on the Koch Brothers cozening up to CAP after having seen Beth Akers and Matt Chingos write for Brookings a think tank which in the past has been careful about what type of funding it receives and from where. You might not know; but, both Matt and Beth the same as Jason Delisle are indirectly funded by Lumina Foundation who has close ties with Sallie Mae and they write on student loans. That is a topic for another post. Back to Matt:

Matt Leichter received his J.D.-M.A. in law (2008) and international affairs (2009) from Marquette University, in Milwaukee, Wisconsin, and spent a semester and summer of law school at Temple University’s Tokyo campus in 2007. Before law school, he taught English at Omiya High School in Saitama, Japan, for two years. He started the Law School Tuition Bubble in May of 2010. Matt writes about student debt. I read his post on Jason Delisle’s critiqe on Income Based Repayment for Masters level graduates and felt it was worthy for AB. Income Based Repayment (IBR) caps the amount of money a graduate is to pay based upon income.

Grad PLUS and the IBR

Jason Delisle and William Holt did an opinion piece on the Washington Post and a similar argument by Jason Delisle has popped up over at the Washington Monthly. Jason has claimed the Income Based Repayment (IBR) plan in Student Loans has first cost the government $21 billion and then cost the government $19 billion.

While Alan Collinge would tell you the IBR is nothing to crow about as it takes forever to be free of the student loan, I think he might take issue with the costs cited by Jason which are brought into perspective by Matt Leichter on his blog Law School Tuition Bubble. Matt performs an excellent take down of Jason and William’s points which I will paraphrase here:

1. No evidence is cited by Jason Delisle showing the resulting $21 billion cost is the result of the IBR. This is supposition and conjecture on the part of Jason and meant to cause consternation on the part of the reader as to the alleged abuse. Matt Leichter of Law School Tuition Bubble blog takes issue with Jasons stance and attributes the $21 billion to changes to the model inputs reflecting less job growth or could potentially be the result of greater participation in the program. Without the evidence of where the numbers came from, Jason’s opinion piece is speculation.

2. Matt continues the take down of Jason’s adding more points which the reader can dwell upon. Jason uses the $21 billion eye catcher to segue into graduate students abusing the IBR to back back less. The problem is Graduate Plus Loan Program causing the issue rather the IBR with its unlimited funding. While admitting this is an issue, Jason takes the opportunity to attack the IBR.

3. Grad students abusing the IBR program is more supposition on Jason’s part. He has not established a foundation of data and stats to support his contention. There is only a hypothetical with no data to support Jason’s conjecture. For example, some data might show how many Grad students are on the IBR, how many have high enough incomes to repay the loans in less than 5 years, and how many Grad students are on the IBR who could not afford to repay under the old programs.

Broad based data establishes a foundation to which we can ascertain how many students are abusing the IBR under its current rules. Answering the question of how many students are not paying back within 20-25 years as opposed to beneficiaries of the IBR may cause changes in the rules. Jason expects us to accept his hypothetical on pure faith.

4. To make his point Jason develops a hypothetical Law student just graduating, having $150,000 in debt and earning $70,000 annually.

Jason’s hypothetical student graduates with $150,000 in college debt and a $70,000 does little to bolster his argument. For example; while the $150,000 in debt is possible, the salary is not as it exceeds the median for a student just starting out as reported by the National Association for Law Placement, Inc. Matt correctly points out Jason’s hypothetical is in the upper 23% of household income for beginner lawyers. The true median income is ~$62,000 and would include part time workers and those unemployed as reported by the NALP.

Jason then add a spouse wife to the household to boaster his hypothetical. The spouse makes $80,000 annually which ratchets the couple into the top 10% bracket of houshold incomes. The question still remains of validity of this hypothetical as Jason never cites any data to support his contention. Once again we are left in the dark with Jason’s assumption.

Furthermore, the IBR does not take spousal income into account and Jason and William take the IBR to task for not doing so. Matt counters with an argument; “Are you shocked? Well, the response is, so what? Robert’s wife didn’t sign the master promissory notes any more than she would his gambling debts. If Robert wants to leave work to raise their kids, for example, it doesn’t imply that his wife would essentially assume his debts. Would the NAF say this if Robert were Roberta? How would unmarried Robert feel if he had to tell his bride-to-be that she’d be partly on the hook for his student loans if they got married? Again, what if Robert were Roberta, who would be more likely to take time off to raise children?

Delisle and Holts hypothetical do little to make their claim the IBR is at fault for this phenomena. In realty and as Matt correctly points out, the same could have occurred with a lottery winning by the parents or other gains neither of which have any influence on IBR policy. In the end, how many actually gain from the loophole in policy. Jason’s supposition again lacks data.

5. The claim of Graduates IBR being unfair beneficiaries is made again by Delisle and Holt and they comprise 50% of all recipients of the IBR program. Graduates also attend Bachelor programs (quelle surprise!). Here again no data is supplied and we are given an opinion of what may be taking it to the extreme. Jason creates another Pink Cadillac scenario, an image of graduates driving Pink Cadillacs to currency exchanges to cash their big checks are about all Delisle and Holt can conjure up. We are left in the dark to imagine this to be occurring on a regular basis.

6. IBR was never developed by lawmakers with Grad Plus Loans in mind. Rather than a problem with the IBR, the problem lies with the Grad Plus program which both Delisle and Holt overlook to make their attack. As Matt Leichter questions the credibility of the complainers contentions throughout their expose, no data is presented to support their claims of misappropriation of funds which is to the root cause. The claims are all hypothetical.

7. Jason takes this one-step further in his analysis, stating the Federal Government provides loans at a reasonable interest rate(?). This is so far from the reality of the situation it borders on the ludicrous. As I have stated before, no other loan made has such tight restrictions on it and can not be discharged through bankruptcy. The distinction between the two types of Loans is one can be discharged in bankruptcy and the other can not. Guess which one can be discharge? Students are bound by a signature to indentured servitude until the loan is paid off or 20-25 years pass of IBP. Matt make a common sense point on the real implicit contract between students, the government, and student loans; “the implicit contract was the Loans would make debtors into more productive workers filling higher paying and skilled jobs.” The evidence since the seventies does not support the advent of more and higher paying jobs to have happened and Jason’s version of contract has gone unfulfilled from the government side leaving many of its citizens economically harmed.

I can not add to Matt’s closing statement and will use it verbatim: “As far as contracts go, this one has been drafted in favor of the government. When its underlying assumptions are true, everyone wins, but when they’re not, the government won’t be held accountable for self-serving research, false promises, and reckless lending. Instead, attempts to help the debtors will face resistance by people like Delisle and Holt, who will howl at all the alleged benefits the supposed (me) lucky-duckies are getting—and right now we’re only talking about grad student debt! Consequently, you should expect the endgame for all this unpayable student loan debt to be really, really acrimonious.”


“New America Foundation: Let the Sins of Grad PLUS Be Visited Upon IBR”The Law School Tuition Bubble blog, Matt Leichter, February 2015.

“A student loan blind spot”Washington Post,

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Alan Collinge of Student Loan Justice on CAP’s Current Efforts to Revamp Student Loans

It has been a while since I had last talked to Alan. I knew at the time he was at issue with a stance the Center for American Progress was taking on Student Loans which surprising are supported by some of our more popular consumer advocates. Kind of makes sense as we now see the Center for American Progress cuddling up with the Koch Brothers? Not what I would call a marriage made in heaven benefiting us and I wonder who will own whom in the end. Law and Order Koch Brothers suddenly concerned about the incarceration rate in the US? Yeah, right! Save that one for another post. Anyhow, Alan moved from Tacoma, Washington to Washington, D.C. to confront CAP on their stance.

Amongst loans, it is no secret student loans make money and make even more money in default. from the Federal Family Education Loan Program (FFELP) student loan which comprises a majority of all outstanding student loans; the Department of Education can recover $1.22 (before collection costs, and the government’s “cost of money”) on every dollar loaned. Student loans are not a zero sum game as some critics might have you believe.


On refinancing student loans, one venture capitalist pointed out: It’s a trillion-dollar opportunity. You don’t get a lot of those,” gushes Brian Hirsch, cofounder of Tribeca Venture Partners, an early investor in CommonBond. (He sits on its board.)

Well, maybe not a trillion, but hundreds of billions. About 75% of the $1.2 trillion in outstanding student loan debt is eligible to be refinanced, and the creditworthy tranche of this debt–the part private investors are eyeing–totals at least $200 billion. So far Common Bond has made some $100 million in loans to current students and graduates of 109 M.B.A., J.D., M.D. and engineering programs at 50 brand-name schools. Another VC-backed company, three-year-old SoFi (for Social Finance), has refinanced more than $1 billion in student debt held by 13,500 graduates of 2,200 schools, making it the largest refinancer in the market. This leaves no doubt where some of the emphasis on refinancing student loans my be coming from today. I wonder if Moodys will rate it AAA as they did with tranched CDO/MBS and not care about the securty of the loan(s) in each tranche?

In particular the former statistic of payback after default refutes the arguments of student loan critics the likes of Jason Delisle (New America) and Brookings Beth Akers and Matt Chingos who advocate Fair Market Valuation of Student Loans to assess risk. It might make sense to do so, if a student loan was the same as a home mortgage or a piece of machinery in a factory; but, student loans are not the same. By a student’s signature, a student loan becomes a roach motel as there is no way out through bankruptcy. You can wait 20-25 years and get out of it on an IBP plan, die, become disabled, or do public service to get out of potions of it. If you default, the Government will garnish your wages, SS, Disability to collect their money besides disqualify you from any federal programs.

CAP’s How Qualified Student Loans Could Protect Borrowers and Taxpayers proposes returning bankruptcy protections to student loans. A closer examination of the plan reveals this program would disqualify many federal and private loans from having access to bankruptcy. Instead what is seen are alternatives to bankruptcy such as gainful employment, income based payment, service loan forgiveness, payment on tim interest reductions, etc. most plans of which are teasers with only a low percentage of applicants being accepted and successful. CAP and other liberal advocates push for these repayment programs which in the end result in the majority of people who try for the benefit being kicked out before anything is forgiven. CAP has recruited a former director of the Department of Education lending program David Bergeron who does not appear to have brought anything new to the discussion other than repayment programs which may cause more damage in the end. The issue still remains of bankruptcy protection in the form of what was given to big business and TBTF by Congress and in the end walked away from $billions in responsibility over the decades. Guess students do not get a benefit of the doubt.

Another proposal by David Bergeron and CAP is a federal refinancing plan for private loans. The plan would refinance private loans at lower interest rates, taking them over from private banks at book value and offering a better deal than what was offered to investment firms (made into banks by Geithner and given access to Fed money). Nonperforming loans would be included in this plan also as a bailout and makes the government a private industry bill collector for loans which more than likely should not have been made. The impact of this plan would help a few borrowers and in the end may hurt them as they lose protection under the statutes of limitations.

While Democrats favor the two aforementioned plans, Republicans are still stuck in the past of no bankruptcy protection for student loan holders, complaining of the high cost of repayment programs and the lending system, and suggesting private banks for student loans as subsidized by the Feds can do a better job. Students and parents would be at the mercy of the banks. Republicans would resurrect a taxpayer subsidized banking system such as what our venture capitalist would love and was put to its grave by Obama who stopped short of revamping the entire student loan system. There is no serious accommodation for middle and low income students coming from Republicans. Republicans have abandoned their free-market attitude by not affording students the same protection afforded TBTF and big business under bankruptcy and Democrats have embraced the past with people such as Bergeron from the Department of Education who help create today’s student loan and repayment environment.

What mostly brought the nation to today’s bad student loan environment is a Congress dead set against “supposed” lazy students escaping any responsibility for something they signed up for as 18 year-olds, a student loan system fraught with a profit motive forcing young people and their parents into an indentured servitude to banks with the Gov as the bill collector, nonprofit and for-profit colleges not having any responsibility for the loans offered to their students, uncontrolled college employee expenses due to the addition of staff beyond teaching staff, decreased state funding for colleges, federal grants and scholarships which have not kept up with inflation, etc. The only cost to have exceeded healthcare cost increases is that of the higher cost of education.

In the end, what many young college graduates earned in a living well beyond what could be made with just a high school education is far less when compared to decreased high school income and years previous. While the percentage difference may be the same, the actual income for college grads has decreased. Young couples with little or no student loan debt have accumulated higher levels of assets in comparison.

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“We broke it, but you’ve got to fix it.”

Worthy of a read of (or if you want a listen to) a recent Commencement speech given by Ken Burns at Washington University calling on recent graduates to help fix what previous generations have left broken and incomplete. I have posted both the verbal and the written version for you to select.

A comment extracted from the speech:

“a tall, thin lawyer, prone to bouts of debilitating depression, addressed the Young Men’s Lyceum. The topic that day was national security.

“At what point shall we expect the approach of danger?” he asked his audience . . . . Shall we expect some transatlantic military giant to step the Earth and crush us at a blow?” Then he answered his own question: “Never. All the armies of Europe, Asia, and Africa . . . could not by force take a drink from the Ohio [River] or make a track on the Blue Ridge in a trial of a thousand years . . . If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.”

It is a stunning, remarkable statement.”

Ken Burns answers what is wrong with America and why we have not been able to get it right after the Civil War and during Reconstruction. “You’re joining a movement that must be dedicated above all else — career and personal advancement — to the preservation of this country’s most enduring ideals. You have to learn, and then re-teach the rest of us that equality — real equality — is the hallmark and birthright of ALL Americans. Thankfully, you will become a vanguard against a new separatism that seems to have infected our ranks, a vanguard against those forces that, in the name of our great democracy, have managed to diminish it.”


The Text: Chancellor Wrighton, members of the Board of Trustees and the Administration, distinguished faculty, Class of 1965, hard-working staff, my fellow honorees, proud and relieved parents, calm and serene grandparents, distracted but secretly pleased siblings, ladies and gentlemen, boys and girls, graduating students, good morning. I am deeply honored that you have asked me here to say a few words at this momentous occasion, that you might find what I have to say worthy of your attention on so important a day at this remarkable institution.

It had been my intention this morning to parcel out some good advice at the end of these remarks — the “goodness” of that being of course subjective in the extreme — but then I realized that this is the land of Mark Twain, and I came to the conclusion that any commentary today ought to be framed in the sublime shadow of this quote of his: “It’s not that the world is full of fools, it’s just that lightening isn’t distributed right.” More on Mr. Twain later.

I am in the business of history. It is my job to try to discern some patterns and themes from the past to help us interpret our dizzyingly confusing and sometimes dismaying present. Without a knowledge of that past, how can we possibly know where we are and, most important, where we are going? Over the years I’ve come to understand an important fact, I think: that we are not condemned to repeat, as the cliché goes and we are fond of quoting, what we don’t remember. That’s a clever, even poetic phrase, but not even close to the truth. Nor are there cycles of history, as the academic community periodically promotes. The Bible, Ecclesiastes to be specific, got it right, I think: “What has been will be again. What has been done will be done again. There is nothing new under the sun.”

What that means is that human nature never changes. Or almost never changes. We have continually superimposed our complex and contradictory nature over the random course of human events. All of our inherent strengths and weaknesses, our greed and generosity, our puritanism and our prurience parade before our eyes, generation after generation after generation. This often gives us the impression that history repeats itself. It doesn’t. It just rhymes, Mark Twain is supposed to have said…but he didn’t (more on Mr. Twain later.)

Over the many years of practicing, I have come to the realization that history is not a fixed thing, a collection of precise dates, facts and events (even cogent commencement quotes) that add up to a quantifiable, certain, confidently known, truth. It is a mysterious and malleable thing. And each generation rediscovers and re-examines that part of its past that gives its present, and most important, its future new meaning, new possibilities and new power.

Listen. For most of the forty years I’ve been making historical documentaries, I have been haunted and inspired by a handful of sentences from an extraordinary speech I came across early in my professional life by a neighbor of yours just up the road in Springfield, Illinois. In January of 1838, shortly before his 29th birthday, a tall, thin lawyer, prone to bouts of debilitating depression, addressed the Young Men’s Lyceum. The topic that day was national security. “At what point shall we expect the approach of danger?” he asked his audience . . . . Shall we expect some transatlantic military giant to step the Earth and crush us at a blow?” Then he answered his own question: “Never. All the armies of Europe, Asia, and Africa . . . could not by force take a drink from the Ohio [River] or make a track on the Blue Ridge in a trial of a thousand years . . . If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.” It is a stunning, remarkable statement.

That young man was, of course, Abraham Lincoln, and he would go on to preside over the closest this country has ever come to near national suicide, our Civil War — fought over the meaning of freedom in America. And yet embedded in his extraordinary, disturbing and prescient words is a fundamental optimism that implicitly acknowledges the geographical force-field two mighty oceans and two relatively benign neighbors north and south have provided for us since the British burned the White House in the War of 1812.

We have counted on Abraham Lincoln for more than a century and a half to get it right when the undertow in the tide of those human events has threatened to overwhelm and capsize us. We always come back to him for the kind of sustaining vision of why we Americans still agree to cohere, why unlike any other country on earth, we are still stitched together by words and, most important, their dangerous progeny, ideas. We return to him for a sense of unity, conscience and national purpose. To escape what the late historian Arthur Schlesinger, Jr., said is our problem today: “too much pluribus, not enough unum.”

It seems to me that he gave our fragile experiment a conscious shock that enabled it to outgrow the monumental hypocrisy of slavery inherited at our founding and permitted us all, slave owner as well as slave, to have literally, as he put it at Gettysburg, “a new birth of freedom.”

Lincoln’s Springfield speech also suggests what is so great and so good about the people who inhabit this lucky and exquisite country of ours (that’s the world you now inherit): our work ethic, our restlessness, our innovation and our improvisation, our communities and our institutions of higher learning, our suspicion of power; the fact that we seem resolutely dedicated to parsing the meaning between individual and collective freedom; that we are dedicated to understanding what Thomas Jefferson really meant when he wrote that inscrutable phrase “the pursuit of Happiness.”

But the isolation of those two mighty oceans has also helped to incubate habits and patterns less beneficial to us: our devotion to money and guns; our certainty — about everything; our stubborn insistence on our own exceptionalism, blinding us to that which needs repair, our preoccupation with always making the other wrong, at an individual as well as global level.

And then there is the issue of race, which was foremost on the mind of Lincoln back in 1838. It is still here with us today. The jazz trumpeter Wynton Marsalis told me that healing this question of race was what “the kingdom needed in order to be well.” Before the enormous strides in equality achieved in statutes and laws in the 150 years since the Civil War that Lincoln correctly predicted would come are in danger of being undone by our still imperfect human nature and by politicians who now insist on a hypocritical color-blindness — after four centuries of discrimination. That discrimination now takes on new, sometimes subtler, less obvious but still malevolent forms today. The chains of slavery have been broken, thank God, and so too has the feudal dependence of sharecroppers as the vengeful Jim Crow era recedes (sort of) into the distant past. But now in places like — but not limited to — your other neighbors a few miles as the crow flies from here in Ferguson, we see the ghastly remnants of our great shame emerging still, the shame Lincoln thought would lead to national suicide, our inability to see beyond the color of someone’s skin. It has been with us since our founding.

When Thomas Jefferson wrote that immortal second sentence of the Declaration that begins, “We hold these truths to be self-evident, that all men are created equal…,” he owned more than a hundred human beings. He never saw the contradiction, never saw the hypocrisy, and more important never saw fit in his lifetime to free any one of those human beings, ensuring as we went forward that the young United States — born with such glorious promise — would be bedeviled by race, that it would take a bloody, bloody Civil War to even begin to redress the imbalance.

But the shame continues: prison populations exploding with young black men, young black men killed almost weekly by policemen, whole communities of color burdened by corrupt municipalities that resemble more the predatory company store of a supposedly bygone era than a responsible local government. Our cities and towns and suburbs cannot become modern plantations.

It is unconscionable, as you emerge from this privileged sanctuary, that a few miles from here — and nearly everywhere else in America: Baltimore, New York City, North Charleston, Cleveland, Oklahoma, Sanford, Florida, nearly everywhere else — we are still playing out, sadly, an utterly American story, that the same stultifying conditions and sentiments that brought on our Civil War are still on such vivid and unpleasant display. Today, today. There’s nothing new under the sun.

Many years after our Civil War, in 1883, Mark Twain took up writing in earnest a novel he had started and abandoned several times over the last half-dozen years. It would be a very different kind of story from his celebrated Tom Sawyer book, told this time in the plain language of his Missouri boyhood — and it would be his masterpiece.

Set near here, before the Civil War and emancipation, ‘the Adventures of Huckleberry Finn’ is the story of two runaways — a white boy, Tom Sawyer’s old friend Huck, fleeing civilization, and a black man, Jim, who is running away from slavery. They escape together on a raft going down the Mississippi River.

The novel reaches its moral climax when Huck is faced with a terrible choice. He believes he has committed a grievous sin in helping Jim escape, and he finally writes out a letter, telling Jim’s owner where her runaway property can be found. Huck feels good about doing this at first, he says, and marvels at “how close I came to being lost and going to hell.”

But then he hesitates, thinking about how kind Jim has been to him during their adventure. “…Somehow,” Huck says, “I couldn’t seem to strike no place to harden me against him, but only the other kind. I’d see him standing my watch on top of his’n, ‘stead of calling me, so I could go on sleeping; and see how glad he was when I come back out of the fog;…and such like times; and would always call me honey…and do everything he could think of for me, and how good he always was…”

Then, Huck remembers the letter he has written. “I took it up, and held it in my hand,” he says. “I was a-trembling because I’d got to decide, forever, betwixt two things, and I knowed it. I studied a minute, sort of holding my breath, and then says to myself: ‘All right then, I’ll go to hell’ — and tore it up.”

That may be the finest moment in all of American literature. Ernest Hemingway thought all of American literature began at that moment.

Twain, himself, writing after the Civil War and after the collapse of Reconstruction, a misunderstood period devoted to trying to enforce civil rights, was actually expressing his profound disappointment that racial differences still persisted in America, that racism still festered in this favored land, founded as it was on the most noble principle yet advanced by humankind — that all men are created equal. That civil war had not cleansed our original sin, a sin we continue to confront today, daily, in this supposedly enlightened “post-racial” time.

It is into this disorienting and sometimes disappointing world that you now plummet, I’m afraid, unprotected from the shelter of family and school. You have fresh prospects and real dreams and I wish each and every one of you the very best. But I am drafting you now into a new Union Army that must be committed to preserving the values, the sense of humor, the sense of cohesion that have long been a part of our American nature, too. You have no choice, you’ve been called up, and it is your difficult, but great and challenging responsibility to help change things and set us right again.

Let me apologize in advance to you. We broke it, but you’ve got to fix it. You’re joining a movement that must be dedicated above all else — career and personal advancement — to the preservation of this country’s most enduring ideals. You have to learn, and then re-teach the rest of us that equality — real equality — is the hallmark and birthright of ALL Americans. Thankfully, you will become a vanguard against a new separatism that seems to have infected our ranks, a vanguard against those forces that, in the name of our great democracy, have managed to diminish it. Then, you can change human nature just a bit, to appeal, as Lincoln also implored us, to appeal to “the better angels of our nature.” That’s the objective. I know you can do it.

Ok. I’m rounding third.

Let me speak directly to the graduating class. (Watch out. Here comes the advice.)

Remember: Black lives matter. All lives matter.

Reject fundamentalism wherever it raises its ugly head. It’s not civilized. Choose to live in the Bedford Falls of “It’s a Wonderful Life,” not its oppressive opposite, Pottersville.

Do not descend too deeply into specialism. Educate all your parts. You will be healthier.

Replace cynicism with its old-fashioned antidote, skepticism.

Don’t confuse monetary success with excellence. The poet Robert Penn Warren once warned me that “careerism is death.”

Try not to make the other wrong.

Be curious, not cool.

Remember, insecurity makes liars of us all.

Listen to jazz. A lot. It is our music.

Read. The book is still the greatest man-made machine of all — not the car, not the TV, not the computer or the smartphone.

Do not allow our social media to segregate us into ever smaller tribes and clans, fiercely and sometimes appropriately loyal to our group, but also capable of metastasizing into profound distrust of the other.

Serve your country. By all means serve your country. But insist that we fight the right wars. Governments always forget that.

Convince your government that the real threat, as Lincoln knew, comes from within. Governments always forget that, too. Do not let your government outsource honesty, transparency or candor. Do not let your government outsource democracy.

Vote. Elect good leaders. When he was nominated in 1936, Franklin Delano Roosevelt said, “Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference.” We all deserve the former. Insist on it.

Insist that we support science and the arts, especially the arts. They have nothing to do with the actual defense of the country — they just make the country worth defending.

Be about the “unum,” not the “pluribus.”

Do not lose your enthusiasm. In its Greek etymology, the word enthusiasm means simply, “God in us.”

And even though lightning still isn’t distributed right, try not to be a fool. It just gets Mark Twain riled up.

And if you ever find yourself in Huck’s spot, if you’ve “got to decide betwixt two things,” do the right thing. Don’t forget to tear up the letter. He didn’t go to hell — and you won’t either.

So we come to an end of something today—and for you also a very special beginning. God speed to you all.

Ken Burns
Walpole, New Hampshire
Burns delivers call to action to Class of 2015: “Set things right again,” Washington University, May 15, 2015

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